Oil prices edged lower in Asian trading on Wednesday but remained near one-month highs, supported by fresh United States sanctions and geopolitical tensions, while traders looked ahead to this weekend’s Petroleum Exporting Countries (OPEC+) meeting for supply signals.
By 3:25 pm AEST (5:25 am GMT), Brent crude slipped 19 cents, or 0.3%, to US$68.95 a barrel, while U.S. West Texas Intermediate (WTI) crude fell 16 cents, or 0.2%, to US$65.43.
Both benchmarks had gained 1.5% and 2.5% in the previous session, respectively.
The U.S. Treasury announced new sanctions on a network of shipping firms and tankers operated by an Iraqi-Kittitian businessman accused of disguising Iranian oil shipments as Iraqi crude.
Additionally, ANZ analysts pointed to further supply pressures from the Russia-Ukraine conflict. “Ukraine struck two oil refineries in Russia in a continued assault on energy infrastructure that has begun to impact trade flows. Russia’s crude processing runs have fallen to 5.09mb/d through the first 27 days of August, their lowest since May 2022,” they said.
U.S. Treasury Secretary Scott Bessent also signalled that Washington would review potential penalties against Moscow this week.
The focus now shifts to the 7 September OPEC+ meeting. Markets widely expect the cartel and its allies to keep production levels unchanged as they balance supply stability against fragile demand.
Meanwhile, On Wednesday morning, Beijing staged its largest-ever military parade to mark the 80th anniversary of Japan’s defeat in World War Two, with Chinese President Xi Jinping taking centre stage alongside Russia’s Vladimir Putin and North Korea’s Kim Jong Un, following last week’s Shanghai Cooperation Organisation summit where China outlined its vision for a new global security and economic order in challenge to the U.S.
Still, weak economic signals kept oil gains in check. U.S. manufacturing contracted for a sixth consecutive month in August, as President Donald Trump’s tariffs weighed on business confidence and activity, clouding the outlook for fuel demand.
