Oil prices rise after EU agrees Russian sanctions

Investing.com--Oil prices rose Friday, adding to the previous session’s sharp gains fueled by drone attacks on Iraqi oil fields, as investors weighed new European Union sanctions against Russia.

At 08:10 ET (12:10 GMT), Brent Oil Futures expiring in September gained 1.6% to $70.60 per barrel and West Texas Intermediate (WTI) crude futures rose 1.8% to $68.73 per barrel.

EU agrees new Russian sanctions

Crude prices have pressed higher Friday following the EU’s agreement of an 18th sanctions package against Russia over its war in Ukraine, which includes measures aimed at dealing further blows to Russia’s oil and energy industries.

The package, designed to ratchet up pressure on Moscow amid stalled peace negotiations, also includes a planned reduction in the G7’s price cap on Russia’s oil exports. 

Investors are awaiting news from the U.S. on possible further sanctions, after President Donald Trump earlier this week threatened sanctions on buyers of Russian exports unless Moscow agrees a peace deal in 50 days.

Attacks on Iraqi oil fields sparked supply concerns

Oil found support on Thursday on renewed threats of supply disruptions from continued drone strikes on Iraqi Kurdistan oil fields, reportedly by Iran-backed militias.

That said, Iraq’s federal government announced a deal to resume crude exports from Iraqi Kurdistan to Turkey following a two-year halt. While the Kurdistan Regional Government has yet to confirm the plan, the move signals progress in talks between Baghdad and Erbil.

Prices supported amid signs of tightness

Data from the U.S. Energy Information Administration (EIA) this week showed that {{8849|U.S. crude oil inventories fell by 3.9 million barrels, larger than analysts’ expectations of a 1.8 million-barrel decrease, indicating tightening market conditions.

Earlier to this, the Organization of the Petroleum Exporting Countries (OPEC) maintained its oil-demand forecast for 2025 and 2026, expressing optimism that global trade tensions will ease in the coming months.

Oil prices rose nearly 3% last week as the International Energy Agency highlighted a tight prompt market.

Despite OPEC+’s higher-than-expected output hike, the world oil market may be tighter than it appears, the agency said last week, as refineries ramp up processing to meet summer travel demand.

Ayushman Ojha contributed to this article