Oil Prices Slip Amid Geopolitical Tensions and Supply Concerns

Oil prices edged lower in Asian trading on Tuesday as markets weighed heightened geopolitical risks against lingering concerns about global demand.

Brent crude futures expiring in November fell 0.3% to $66.36 per barrel, while West Texas Intermediate (WTI) crude futures also dropped 0.3% to $62.10 per barrel as of 21:47 ET (01:47 GMT). Both benchmarks had already settled slightly lower on Monday after Iraq announced an increase in exports under the OPEC+ framework, reigniting worries about oversupply.

Geopolitical Risks Add Support

The Middle East remained at the forefront of traders’ concerns, with Israeli airstrikes intensifying in Gaza, forcing hospitals to close and drawing widespread international criticism. Meanwhile, momentum is building at the United Nations, where a coalition of nations formally backed Palestinian statehood — a development opposed by Israel and the United States. This deepening rift underscores heightened uncertainty in a region that accounts for roughly one-third of the world’s crude supply.

At the same time, Ukraine has stepped up drone strikes on Russian energy infrastructure, damaging refineries and halting shipments at a key terminal earlier this month. The attacks highlight the vulnerability of Russia’s energy export system and raise doubts about the sustainability of its output.

Sanctions Pressure Builds on Russia

The European Union is preparing its latest sanctions package, expected to target Russian liquefied natural gas imports and penalize intermediaries in third countries that facilitate Russian trade. Washington has also ramped up pressure on allies, urging Europe to accelerate its exit from Russian energy supplies while pushing for higher tariffs on imports from China and India, both of which remain significant buyers of Russian crude.

Demand Outlook Caps Gains

Despite the geopolitical risks and looming sanctions, traders remain wary of weak demand fundamentals. Concerns over slowing economic growth globally, coupled with uncertainty about the resilience of U.S. and Chinese consumption, have kept a lid on prices. Analysts suggest that while supply risks may offer a floor for oil markets, the upside remains limited until signs of stronger demand materialize.