Oil prices rose on Tuesday as traders weighed the impact of Western sanctions on Russian oil flows and the move by the United States President, Mr Donald Trump, to pick a new chairman for the Federal Reserve.
Brent crude was up 46 cents or 0.72 per cent to $64.66 a barrel and the US West Texas Intermediate (WTI) crude increased by 65 cents or 1.08 per cent to $60.56 per barrel.
Imports of oil from Russia are set to drop this month as importers and refiners are more careful and still devise workarounds after the US stepped up sanctions on the country’s oil exporters.
Imports from Russia could drop by up to 800,000 barrels per day in November compared to the levels before the US sanctions on Rosneft and Lukoil, according to estimates by Rystad Energy cited by Bloomberg.
China’s state-owned majors including Sinopec and PetroChina have canceled previously ordered Russian oil cargoes, and large state and private refiners are looking for alternative supply in the short term.
Most Indian refiners have halted purchases from Russia after the US sanctions. All but two Indian refiners have skipped placing orders for Russian crude for December after America sanctioned Rosneft and Lukoil, sources with knowledge of the purchases told Bloomberg last week.
President Trump on Tuesday said he was speaking with various people about the Federal Reserve chairman’s job and had some unexpected candidates on the list of those who might replace Jerome Powell.
“We have some surprising names and we have some standard names that everybody’s talking about,” Mr Trump said when asked about the US central bank search during an Oval Office appearance with visiting Saudi Crown Prince Mohammed bin Salman.
The American President has been vocally critical of Mr Powell for holding interest rates steady. Since Mr Trump favours lower interest rates and could likely find a replacement that aligns with this, the market welcomed the news. Lower borrowing costs typically boost demand for oil and push prices higher.
Oil prices are expected to decline through 2026, Goldman Sachs said on Monday, citing a supply wave that keeps the market in surplus. However, it noted that Brent could rise above $70 a barrel in 2026/2027 if Russian output falls more sharply.