US sanctions on Russian oil firms push WTI near a two-week high above $60

    by VT Markets
    /
    Oct 23, 2025
    The price of West Texas Intermediate (WTI) oil jumped to around $60.10 during early Asian trading on Thursday. This rise came after the Trump administration imposed sanctions on key Russian oil companies, raising fears about lower crude oil exports from Russia. The US Energy Information Administration (EIA) reported an unexpected decline in US crude oil inventories, indicating stronger demand. For the week ending October 17, inventories dropped by 961,000 barrels, while forecasts had predicted an increase of 1.8 million barrels.

    Impact of OPEC+ Production Plans

    Despite the good news, potential oversupply could limit further price gains. The Organisation of the Petroleum Exporting Countries and allies (OPEC+) plans to boost oil supply, raising concerns about future surpluses. Recently, the International Energy Agency (IEA) predicted a global oversupply of 4 million barrels per day by 2026. WTI oil, known for its “light” and “sweet” qualities, is a high-quality crude mainly sold in international markets. Its price is influenced by supply, demand, geopolitical events, and the value of the US dollar. Inventory data from the EIA and the American Petroleum Institute (API) can also impact prices; decreases in inventory often suggest rising demand. OPEC’s production decisions have a major influence on WTI oil prices through changes in supply. We are witnessing WTI crude respond strongly to the new US sanctions on major Russian oil companies. The rise to nearly $60.10 is a direct result of worries about tighter global supplies, combined with an unexpected drop in US inventories. This creates a bullish signal in the short term for traders. The geopolitical risk premium in oil prices has clearly increased. Looking ahead to 2025, these new sanctions add to measures first enacted during the early days of the Ukraine war. Traders might consider buying near-term call options to take advantage of possible further price spikes due to Russian retaliation or disruptions in supply chains.

    Surprise Inventory Drop

    The unexpected inventory drop of nearly 1 million barrels last week, in contrast to predictions of an increase, suggests demand may be stronger than expected. We will closely monitor the next EIA report due this Wednesday for confirmation of this trend. Another significant inventory drop would strengthen the bullish argument and likely push prices higher. Nonetheless, we must consider the broader supply landscape. OPEC+ has been signaling an increase in production, marking a shift from the coordinated cuts of 2023 and 2024 that helped maintain prices. This planned boost, along with IEA forecasts of a significant surplus next year, could limit any major price increases above the mid-$60s. The clash between immediate supply disruptions and a longer-term supply surplus creates a situation ripe for increased volatility. The CBOE Crude Oil Volatility Index (OVX) has risen over 15% this past week, which reflects market uncertainty. Options strategies that benefit from price swings, like long straddles, could work well in this environment. In the coming weeks, the immediate trend seems to be upward, favoring bullish positions. However, considering the bearish supply forecasts from major agencies, these positions should be managed carefully. Traders should be ready to take quick profits as the market navigates these conflicting supply and demand signals. Create your live VT Markets account and start trading now.

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