Oil prices rose on Monday as escalating clashes between Russia and Ukraine fueled supply concerns and expectations grew that the Federal Reserve (Fed) will cut rates in September.
Brent crude was trading at $67.66 per barrel at 10.30 a.m. local time (0730 GMT), up 0.4% from the previous close of $67.37.
US benchmark West Texas Intermediate (WTI) rose 0.6% to $64.11 from $63.73 in the prior session.
German Chancellor Friedrich Merz said he sees little chance of a diplomatic breakthrough between Russia and Ukraine, warning that the conflict could drag on for an extended period.
In an interview with public broadcaster ZDF, Merz reaffirmed that despite US President Donald Trump's efforts to end the war, Russian President Vladimir Putin's recent actions demonstrate his lack of interest in negotiations.
"I don't see that happening on either side at the moment, either. So I am preparing myself mentally for the fact that this war could go on for a long time. We are trying to end it as quickly as possible. But certainly not at the price of Ukraine's surrender," Merz said.
Expectations of a prolonged conflict have intensified supply concerns, adding upward pressure on crude prices.
On Friday, 26 EU member states condemned Russia's attacks on Ukrainian cities, including Kyiv, and said they were expediting work on a 19th package of sanctions.
Anticipation that these measures will hit Russian oil producers and exporters is fueling concerns over global supply and supporting prices.
Meanwhile, bets on a Fed rate cut in September continue to underpin crude, with investors expecting a lower-rate environment to spur economic growth and boost oil demand.
However, gains were capped by demand worries linked to Trump's tariff threats and expectations that eight OPEC+ members will increase production.
Anticipation of higher output from OPEC+—including Saudi Arabia, Russia, Iraq, the UAE, Kuwait, Kazakhstan, Algeria, and Oman—has raised concerns about potential oversupply ahead of Sunday's meeting.
Despite US tariff hikes on Indian imports of Russian oil from 25% to 50%, effective August 27, experts still expect Russian exports to India to rise, keeping downward pressure on prices in check.
By Duygu Alhan
Anadolu Agency
energy@aa.com.tr