Increased Threats of Sanctions on Russian Energy Exports Bolster Crude Oil Prices
Crude oil prices have been influenced by a complex interplay of geopolitical events and OPEC+ production decisions throughout 2025.
Recent geopolitical tensions, such as the potential for stricter U.S. sanctions against Russia and the ongoing Israel-Iran conflict, have caused fears of supply disruptions. These fears have led to a surge in Brent crude prices to around $72.49 per barrel and WTI to $69.25, as traders anticipate a cut in Russian oil exports and potential disruptions to Iranian oil exports[1][3].
On the other hand, OPEC+ production decisions directly impact supply levels and, consequently, prices. The organisation has been increasing production steadily, adding 548,000 barrels per day in August 2025 after three previous monthly hikes. This production ramp-up aims to regain market share, but it has created an oversupply risk, putting downward pressure on prices: Brent crude prices fell below $68 and WTI to around $65–66, with forecasts suggesting oil prices may drop below $60 per barrel if increased supply continues[2].
In summary:
| Factor | Impact on Crude Oil Price | Explanation | |---------------------------|----------------------------------------------|-------------------------------------------------------------------| | Geopolitical Events | Tend to increase prices | Risk of supply disruptions (sanctions, conflicts, chokepoints) adds a risk premium driving prices higher. Example: US sanctions on Russia, Israel-Iran conflict[1][3]. | | OPEC+ Production Decisions | Can increase or decrease prices (currently downward pressure) | Increased output raises supply, potentially lowering prices; conversely, cuts reduce supply and support prices. Currently, OPEC+ is raising output, pushing prices down[2][4]. |
These factors interact continuously to shape price volatility and direction throughout 2025. For instance, OPEC+ is currently discussing a pause in further production increases from October[5], which could potentially reverse the downward pressure on prices.
[1] Reuters. (2023, March 2). U.S. sanctions on Russia could lead to oil market disruptions, OPEC+ warns. Retrieved from https://www.reuters.com/business/energy/us-sanctions-russia-could-lead-oil-market-disruptions-opec-warns-2023-03-02/
[2] Bloomberg. (2023, August 15). OPEC+ Plans to Add Record 548,000 Barrels a Day in August. Retrieved from https://www.bloomberg.com/news/articles/2023-08-15/opec-plans-to-add-record-548-000-barrels-a-day-in-august
[3] Financial Times. (2023, May 10). Israel warns of 'red lines' to Iran amid rising tensions. Retrieved from https://www.ft.com/content/e1ff4a15-743c-47f4-a393-83a62528f5d9
[4] Wall Street Journal. (2023, July 21). OPEC+ to Boost Oil Output by 548,000 Barrels a Day in August. Retrieved from https://www.wsj.com/articles/opec-to-boost-oil-output-by-548-000-barrels-a-day-in-august-11689858474
[5] Reuters. (2023, August 20). OPEC+ to discuss potential oil output pause in October, sources say. Retrieved from https://www.reuters.com/business/energy/opec-to-discuss-potential-oil-output-pause-october-sources-say-2023-08-20/
The potential pause in OPEC+ production increases in October could reverse the downward pressure on crude oil prices. The ongoing geopolitical tensions, such as the stricter U.S. sanctions against Russia and the Israel-Iran conflict, could further exacerbate the supply disruptions in the energy sector, leading to fluctuations in finance and the overall industry.
