Oil prices fell on Friday after worries about President Donald Trump administration’s commitment to impose sanctions on Russia’s two biggest oil companies over the war in Ukraine.
Brent crude futures lost 5 cents or 0.1 per cent to trade at $65.94 a barrel, and the US West Texas Intermediate (WTI) crude futures tumbled by 29 cents or 0.5 per cent to $61.50 a barrel.
Despite this, both benchmarks ended the week over 7 per cent higher.
Market analysts noted that there is renewed skepticism that these sanctions will be as harsh, based on previous occurrences.
Mr Trump hit Russia’s Rosneft and Lukoil with sanctions to pressure Russian President Vladimir Putin to end the Ukraine war. The two companies together account for more than 5 per cent of global oil output as Russia was the world’s second-biggest crude oil producer in 2024 after the US.
The US said it was prepared to take further action, while Russian President Vladimir Putin played down the sanctions as an unfriendly act, saying they would not significantly affect the Russian economy and talking up Russia’s importance to the global market.
The sanctions prompted Chinese state oil majors to suspend Russian oil purchases in the short term while refiners in India, the largest buyer of seaborne Russian oil, were set to sharply cut Russian crude imports.
China may be insulated considering the diversification of crude sources and stock availability while India is at risk.
Also, the United Kingdom imposed sanctions on Rosneft and Lukoil last week and the European Union (EU) approved a 19th package of sanctions against Russia that includes a ban on imports of Russian liquefied natural gas.
The EU also added two Chinese refiners with a combined capacity of 600,000 barrels per day, as well as Chinaoil Hong Kong, a trading arm of PetroChina to its Russian sanctions list.
Now, investors will be focusing on a meeting between Trump and Chinese President Xi Jinping next week as the duo work to ease long-standing trade tensions and find solutions to retaliatory tariff measures.