Brent LCOc1 futures were down 22 cents, or 0.27%, at $80.79 a barrel by 0122 GMT, while US West Texas Intermediate (WTI) crude was down 16 cents, or 0.2%, at $78.66 a barrel.
It followed a roughly 2% gain in Monday trade, after the US Treasury Department on Friday imposed sanctions on 183 vessels trading oil as part of Gazprom Neft and Surgutneftegas, as well as Russia’s so-called “shadow fleet” of tankers. The move is expected to cost Russia billions of dollars per month, according to a US official.
“A large portion of Russia’s shadow tanker fleet has been sanctioned, making it more difficult for Russia and buyers to circumvent the G-7 price cap. These sanctions have the potential to cut off 700,000 barrels per day (bpd) of supply. The market, which for this year We expect that to erase the surplus,” ING analysts said in a note.
But analysts added that the actual impact was likely to be minimal as buyers and sellers found ways to continue to get around the restrictions.
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Robert Rennie, head of commodity and carbon strategy at Westpac, said the new measures could affect up to 800,000 bpd of Russian crude exports and 150,000 bpd of diesel exports “for an extended period”.
As a result, Brent prices could move closer to $85 a barrel, Rennie said, also pointing to an extension of OPEC+ production cuts.
Goldman Sachs said on Friday that Brent prices could top $85 a barrel in the short term and $90 a barrel if Russian output declines, along with Iranian production cuts.
US President Joe Biden said prices would stabilize after the sanctions and were not intended to hit the pocketbooks of US consumers.
Weak demand from major buyer China could offset the effect of tight supply. China’s crude oil imports fell in 2024 for the first time in two decades outside of the COVID-19 pandemic, official data showed on Monday.
Six European countries also called on the European Union on Monday to drop its $60 per barrel price cap on Russian offshore crude and refined oil products, aimed at reducing Russia’s ability to wage war in Ukraine.
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