Oil prices climbed as markets reacted to looming U.S. sanctions targeting Russian energy exports, signaling tighter global supply ahead. West Texas Intermediate surged over 2%, breaking above $68 per barrel after President Trump teased a major announcement on Russia and hinted at aggressive tariffs on countries like China and India that continue buying Russian oil. 

Analysts suggest these potential sanctions are offsetting concerns about rising OPEC+ output, especially as Saudi Arabia exceeded its production quota in June amid heightened geopolitical tensions with Iran. 

However, the rally was tempered by Trump's separate threat of a 35% tariff on select Canadian goods, though core energy imports under the USMCA will likely remain unaffected. Meanwhile, traders shrugged off the temporary production surge from Gulf producers, focusing instead on stable Saudi pricing to China and expected output curbs from OPEC+ starting October. 

Finsum: With sluggish global demand growth in 2025 the market may face a delicate balance between geopolitical supply shocks and muted consumption.