Oil prices stayed near their highest level in two weeks on Monday, with traders watching two big things at the same time: a possible U.S. Federal Reserve interest rate cut this week, and rising geopolitical risks that could affect oil coming from Russia and Venezuela.
Brent crude inched up 9 cents to $63.84 a barrel, while U.S. West Texas Intermediate rose 8 cents to $60.16. Both hit their strongest close since November 18.
Right now, markets see an 84% chance that the Fed will cut rates by a quarter point at its meeting on Tuesday and Wednesday. But recent comments from Fed officials suggest the discussion inside the bank may be intense, making investors even more focused on what direction the Fed is taking next.
Meanwhile in Europe, progress on Ukraine peace talks remains slow. Key issues—like security guarantees for Kyiv and the fate of Russian-held areas—are still unresolved. U.S. and Russian officials also disagree on parts of a peace plan proposed by the Trump administration.
Analysts at ANZ said any outcome from Trump’s push to end the war could cause a major shift in global oil supply—possibly more than 2 million barrels per day.
Vivek Dhar from Commonwealth Bank of Australia noted that a ceasefire would likely push prices down, while continued attacks on Russia’s oil infrastructure would push them up.
He added that oversupply may eventually return because Russian oil flows are expected to find new ways around current sanctions. That could slowly pull oil prices back toward $60 a barrel through 2026.
At the same time, G7 countries and the European Union are discussing replacing the current price cap on Russian oil with a full ban on maritime services. According to Reuters sources, that move would tighten global supply even further.
The U.S. is also increasing pressure on Venezuela. In recent weeks, Washington has carried out strikes on boats it says were smuggling drugs from the country, and U.S. officials have even discussed possible military action against President Nicolás Maduro.
In Asia, China’s independent refiners are buying more sanctioned Iranian oil using new import quotas, according to trade sources. This could help ease the recent buildup of unsold crude.
