Oil prices dipped on July 21, 2025, following the first weekly decline of the month. Market participants are closely watching the ongoing trade negotiations in the U.S. and the European Union’s efforts to limit Russian energy exports. Brent crude oil was trading around $69 per barrel after experiencing a 1.5% decrease last week, highlighting the uncertainties in global supply dynamics.
European Union envoys are set to meet as early as this week to prepare for a potential no-deal scenario with U.S. President Donald Trump, whose position has become more rigid as the August 1 deadline approaches. Late last week, the 27-nation bloc finalised a sanctions package against Moscow. This package includes a reduced price cap on Russian crude oil, restrictions on fuels derived from Russian petroleum, and a ban on a major Indian refinery from processing Russian oil. The United Kingdom has joined these efforts, increasing pressure on Russia’s energy sector.
Oil prices were little changed, following their first weekly drop this month, with traders focused on the EU's efforts to curb Russian energy exports. Homayoun Falakshahi from Kpler decodes the impact of the latest sanctions on supply pic.twitter.com/H66MyehQK2
— Reuters Business (@ReutersBiz) July 21, 2025Beijing protested the measures, which affect two Chinese banks and other firms, vowing to “safeguard the legitimate rights and interests of Chinese firms and financial institutions.” China and India emerged as the primary buyers of Russian crude after the 2022 invasion of Ukraine reshaped global oil flows, with shipments largely unaffected by Western restrictions until then.
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Despite trending higher since early May, Brent remains down approximately 7% year-to-date, influenced by the intensification of Trump’s trade war and OPEC+ easing supply curbs. Prices have fluctuated due to developments in the Middle East and sanctions imposed on producers such as Russia and Iran.
In Europe, the price of diesel relative to crude oil neared its highest level since March 2025, indicating strong refinery profitability. The prompt time spread, which had narrowed the gap between closest contracts, rallied on Friday, widening its bullish backwardation structure.
The volatility underscores the oil market’s sensitivity to geopolitical events. Traders anticipate further impacts from U.S.-China talks and EU enforcement, potentially stabilising or pressuring prices in coming weeks.
