Oil prices climb on Russia sanction risks; OPEC+ decision in focus

Investing.com-- Oil prices rose Wednesday as concerns over potential new sanctions on Russia and stalled progress in U.S.-Iran nuclear negotiations raised some supply disruption fears, ahead of a pivotal OPEC+ meeting later this week.

At 08:10 ET (12:10 GMT), Brent Oil Futures rose 1% to $64.21 per barrel and West Texas Intermediate (WTI) crude futures also jumped 1.1% to $61.57 per barrel.

Russia sanction risks push oil higher

Sentiment has been boosted in the crude market Wednesday after U.S. President Donald Trump said that Russian President Vladimir Putin was “playing with fire”, and Trump is considering new sanctions against Russia.

This could put Russian energy flows at risk and disrupt the global oil supply.

Moreover, the U.S. and Iran concluded their fifth round of nuclear talks on Tuesday, which saw limited progress, and the disagreement regarding uranium enrichment remained the point of contention.

If they are not able to reach a deal, the U.S. could further pressure Iranian exports, putting a further squeeze on the supply.

U.S. bans Chevron from exporting Venezuelan oil - Reuters

Adding to the supply issues was a the U.S. decision to prohibit Chevron (NYSE:CVX) from exporting crude from Venezuela under a new asset authorization, increasing concerns over tighter supply.

A Reuters report indicated that the Trump administration has granted Chevron a narrow authorization to retain its assets in Venezuela, including stakes in joint ventures with state oil firm PDVSA. 

While Chevron may preserve assets, it cannot operate oilfields, export crude, or expand activities under the new terms, which aim to prevent payments to President Nicolás Maduro’s government, the report said.

Markets await OPEC+ meeting

That said, most eyes are on the upcoming meeting of the Organization of Petroleum Exporting Countries and allies, collectively known as OPEC+, over the weekend.

The eight OPEC+ members meet on Saturday, and may decide on a similar 411,000 bpd output hike for July, Reuters reported on Tuesday, citing sources.

OPEC+ may also discuss issues around its baselines for 2027 production at its meeting on Wednesday, two delegates from the group said.

OPEC+ has been in the process of unwinding output cuts, with additions to the market in May and June.

Investors also await the American Petroleum Institute’s weekly inventory report, which has been delayed this week due to the U.S. Memorial Day holiday on Monday.

Ayushman Ojha contributed to this article.