Oil continues to rise ahead of G7 talks on Russian exports

Oil prices extended gains on Monday as investors awaited any moves against Russian oil and gas exports that might be taken during the Group of Seven leaders meeting in Germany.

There is a looming prospect of tighter market supplies as Western governments seek ways to reduce Russia’s ability to finance its war in Ukraine, although G7 leaders are also expected to discuss reviving the Iran nuclear deal that could boost Iran’s oil exports.

But for now, supply concerns are overshadowed by growing concerns about the possibility of a global recession after a string of downbeat US economic data.

Brent crude futures rose 22 cents, or 0.2 percent, to $113.34 a barrel, after rising 2.8 percent on Friday. US West Texas Intermediate crude reached $107.73 a barrel, up 11 cents, or 0.1 percent, after rising 3.2 percent in the previous session.

And contracts for the two crudes recorded their second weekly decline last week, with the rise in interest rates in the major economies strengthening the dollar and raising fears of a recession.

However, oil prices remained well supported above $100 a barrel with the continued tight supply of crude and petroleum products due to Western sanctions on Russian oil.

Group of Seven leaders are expected this week to discuss options to tackle rising energy prices, substituting Russian oil and gas imports, as well as imposing more sanctions that do not exacerbate inflation.

Among these measures is setting a cap on the price of Russian crude and oil products exports, with the aim of reducing Russia’s revenue while limiting harm to other economies.

On Sunday, a French presidency official said the G7 would also discuss the possibility of reviving Iran nuclear talks after the European Union foreign policy chief met senior officials in Tehran to try to restart the stalled negotiations.