Oil prices advanced modestly on Monday, extending gains from the previous session and touching multi-week highs as markets digested the prospect of tougher sanctions on Russia that could disrupt global supply chains.
However, rising output from Saudi Arabia and continued uncertainty around U.S. trade policy limited upside momentum.
By 2:50 p.m. AEST (4:50 a.m. GMT), Brent crude futures climbed 15 cents or 0.2% to US$70.51 per barrel, while U.S. West Texas Intermediate (WTI) crude futures rose by the same margin to US$68.60.
Both benchmarks had rallied strongly on Friday, with Brent up 2.5% and WTI gaining 2.8%.
The strength followed comments from U.S. President Donald Trump on Sunday that the United States would supply Patriot air defence systems to Ukraine.
Trump is also expected to make a “major statement” on Russia on Monday.
In Washington, a bipartisan bill proposing fresh sanctions on Russia gained momentum in Congress last week. The legislation, designed to push Russia toward peace talks, still awaits formal backing from President Trump.
Meanwhile, oil markets were also supported last week by a bullish outlook from the International Energy Agency (IEA), which said that global oil markets may be tighter than they appear.
The IEA cited strong seasonal demand from refineries operating at peak summer capacity, as well as increasing consumption for power generation and travel.
Despite the bullish backdrop, upside for oil prices was tempered by signs of increased production from Saudi Arabia. Analysts at ANZ said fresh data suggested the kingdom boosted output above its agreed quota under the OPEC+ agreement.
The IEA reported that Saudi oil production rose to 9.8 million barrels per day (bpd) in June, 430,000 bpd above the 9.37 million bpd implied OPEC+ target.
This marked the highest daily import rate since August 2023 and added to positive sentiment around demand recovery in the world's second-largest economy.
Still, investors remain cautious as markets await developments in U.S. tariff negotiations. With President Trump imposing sweeping levies on trade partners including Canada, the European Union, Mexico, and Japan, uncertainty over global economic growth and energy demand continues to cloud the outlook for crude.
