Oil opened the week’s trading with limited gains, as Brent crude rose to around $67.13 per barrel, while West Texas Intermediate (WTI) recorded $63.15 for the October contract and $62.83 for the November contract. This performance reflects an immediate response by traders to recent geopolitical developments, while at the same time showing that the scope of gains remains limited due to the balance between supportive and bearish factors driving price action.
Geopolitical tensions in Europe have resurfaced following Russian airstrikes near the Polish border and repeated violations of NATO airspace, reviving concerns over European energy security. In the Middle East, uncertainty deepened after some Western countries recognized a Palestinian state, casting further shadows on the stability of one of the world’s most critical energy-producing regions. These developments heightened anxiety and kept markets in a constant state of anticipation for any potential escalation.
Despite these political pressures, supply dynamics remain the most influential factor on short term price movements. Iraq announced an increase in its oil exports to exceed 3.4 million barrels per day during September, confirming a gradual return of production following OPEC+ cuts. At the same time, global inventory data showed significant stockpile accumulation in recent months, indicating that supply continues to outpace demand. This imbalance places a ceiling on oil’s upward potential and limits bullish momentum.
On the sanctions front, the European Union unveiled its 19th package of restrictions against Russia, targeting refiners, petrochemical firms, and traders in third countries including China accused of circumventing rules on Russian energy exports. The proposal also included blacklisting 118 vessels from Russia’s “shadow fleet,” in addition to moving forward the ban on Russian liquefied natural gas (LNG) imports to the start of 2027, under direct U.S. pressure. These measures add further political strain on Moscow’s exports and tighten restrictions on its energy trade flows.
Meanwhile, Ukraine intensified its strikes against Russia’s energy infrastructure, targeting the Saratov and Novokuibyshevsk refineries, causing explosions and major fires. Combined, these facilities process more than 15 million tons of crude annually, and their disruption even if temporary poses a direct threat to Russia’s crude and refined product exports. Markets interpreted these attacks as a supportive factor for prices, as they tighten global supply margins and elevate risks to supply chains.
In light of these developments, oil finds itself caught between two opposing forces: the pressure of abundant supply and rising inventories on one side, and heightened geopolitical tensions, Western sanctions, and Ukrainian attacks on the other. From a technical perspective, current levels around $62 for WTI and $66 for Brent represent strong support zones, while the $68–70 range remains a likely resistance area in the short term. Continued supply disruptions or political escalation could open the door for higher price levels, whereas sustained supply flows at current rates may keep prices under pressure.
Stay informed about global markets through our previous analyses. and Now, you can also benefit from LDN company services via the LDN Global Markets trading platform.
