Uncertainty over U.S. pipeline restart and Russian supplies is in favor of oil industry

After Russia announced a decrease in production following a price cap on oil exports from the West, and the main pipeline that delivers to the U.S. was closed, oil prices rose on Monday.

After last week's Brent and WTI hit their lowest level since late 2021, there has been a slight uptick in oil prices for both grades. This is due to the likely impact on oil demand of the risks of a global recession.

According to Edward Moya, a senior market analyst at OANDA, among the factors of rising oil prices are the closure of the Keystone pipeline, the easing of coronavirus restrictions from China, as well as the increasing risks of production cuts from Russia.

According to a note from ANZ analysts, despite the fact that the uncertainty over EU sanctions and price caps on Russian oil has contributed to high price volatility in the market, so far the impact of sanctions on global markets has been limited.

The Minister of Energy of Saudi Arabia believes that the impact of Western sanctions and price-capping actions has not yet had a definite effect. He added that the ways to implement them are still not clear.