Oil prices extended gains on Monday after the EU imposed new sanctions on Russia and tensions rose over Moscow's alleged violations of Baltic airspace, while investors also weighed prospects for further US Federal Reserve (Fed) interest rate cuts.
Brent crude was trading at $66.68 per barrel at 9.38 a.m. local time (0638 GMT), up 0.84% from the previous close of $66.12.
US benchmark West Texas Intermediate (WTI) increased by 0.88% to $62.87 from $62.32 in the prior session.
Prices gained after the European Commission proposed the 19th sanctions package against Russia, targeting Russian LNG, oil revenues, shadow fleet vessels, banks, crypto, and export of military-use goods.
"The Commission's proposal for the 19th sanctions package will aim to weaken Russia's already weakened war economy further," EU Commissioner Valdis Dombrovskis said during the Eurogroup press conference in Copenhagen.
Stating that no one has implemented stronger sanctions than Europe, Dombrovskis emphasized that the sanctions are effective, particularly as part of a coordinated G7 approach.
He said that G7 sanctions have already inflicted real costs on the Russian economy, ranging in the hundreds of billions.
"But it is clear that we must step up the pressure against Russia further to make its war of aggression unsustainable," Dombrovskis stated, adding that the details will be disclosed "very soon."
Prices also firmed after Russia allegedly violated Baltic airspace and US President Donald Trump pledged to defend Poland and the Baltic states if Moscow escalates further.
"Yeah, I would," Trump said when asked whether he would help defend Poland and Baltic countries from Russia if Moscow keeps escalating. This came before he departed for a memorial service of assassinated conservative political commentator Charlie Kirk in Glendale, Arizona.
On Friday, three suspected Russian MiG-31 fighter jets entered Estonian airspace over the Gulf of Finland without permission for 12 minutes.
Meanwhile, optimism that the Fed will continue cutting interest rates and positive signals from Trump's recent meeting with Chinese President Xi Jinping were tempered by a new US measure requiring companies to pay a $100,000 annual fee for H-1B work visas, a move that analysts say is weighing on global risk appetite.
Investors are closely tracking the Fed's policy path, with markets pricing in 44 basis points of rate cuts over the two remaining meetings this year.
Analysts say lower interest rates can boost economic growth and oil demand by reducing borrowing costs for consumers.
By Handan Kazanci
Anadolu Agency
energy@aa.com.tr
