Quick overview

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Oil prices spiked in the first trading session of the week amid ongoing military action between Russia and Ukraine. Ukraine launched a massive drone attack on Russia over the weekend in retaliation for Russian aggression last week, further undermining upcoming ceasefire negotiations.

The two nations are scheduled to hold peace talks on Monday, and the attack could further erode their already shaky relationship.

A bipartisan effort in the U.S. Congress to impose additional sanctions on Russia’s oil industry, adding pressure on significant buyers like China and India.

Markets overlooked an output increase by the Organization of the Petroleum Exporting Countries and allies (OPEC+), because the possibility of additional sanctions suggests tighter supplies.

West Texas Intermediate crude futures increased 2.4 percent to $61.23 a barrel, while Brent oil futures for August rose 2.3 percent to $64.23 a barrel.

According to a Bloomberg report, Republican Senator Lindsey Graham and Democrat Richard Blumenthal supported levying sanctions on Russia’s energy sector.

The new measures, which include a 500 percent tariff on imports from nations that buy Russian oil, aim to pressure top buyers China and India to refrain from purchasing discounted Russian crude. Given that China and India are significant consumers of Russian oil, such a move could seriously restrict global oil supplies.

They would eventually need to seek oil from other sources, possibly at higher prices. As tensions between Russia and Ukraine escalated despite mediocre U.S. de-escalation efforts, the bill is likely also intended to exert more pressure on Russia to agree to a ceasefire with Ukraine.