Oil tops $70 as G7 split undermines EU plan to cut Russian revenue

Oil prices have climbed back above $70 per barrel, driven by geopolitical tensions and growing doubts about the EU’s strategy to squeeze Moscow’s oil income. A lack of unity within the G7 and former US President Donald Trump’s refusal to back Europe’s plan have further weighed on the initiative.

Last week, oil was hovering around $60 after the EU announced new sanctions, including a tighter price cap on Russian crude at $45 per barrel, down from $60. However, escalating conflict between Israel and Iran and Trump’s rejection of the EU line pushed prices higher. On Monday, Brent was up 0.33% at $73.49 a barrel, while WTI rose 0.40% to $70.50.

The EU fears that without Washington’s support, its new cap may fail to gain traction. According to Bloomberg, some EU members are hesitant to proceed without US backing and want stronger coordination within the G7. The goal, supported by the UK, is to cut the Kremlin’s oil revenue used to fund the war in Ukraine.

Meanwhile, tensions in the Middle East have led Goldman Sachs to revise its oil forecasts. The bank now sees Brent potentially rising above $90 if Iranian exports are disrupted, and over $100 in more severe scenarios. In its base case, Goldman expects partial supply compensation from OPEC+ and prices eventually easing back to $60 by 2026. Despite the risks, Goldman still sees Brent ending 2025 at around $59 a barrel, citing expected supply growth outside the US.