Oil prices dipped slightly on Monday, with the latest European sanctions on Russian oil expected to have minimal impact on supplies while U.S. tariffs ensure demand concerns remain.

Brent crude futures dropped 38 cents, or 0.55%, to $68.90 a barrel by 0925 GMT after settling 0.35% down on Friday. U.S. West Texas Intermediate crude declined 30 cents, or 0.45%, to $67.04 after a 0.3% decline in the previous session.

The European Union on Friday approved the 18th package of sanctions against Russia over the war in Ukraine, which also targeted India's Nayara Energy, an exporter of oil products refined from Russian crude.

"The latest round of EU sanctions aren't necessarily going to change the oil balance. That's why the market is not reacting much," said Harry Tchiliguirian at Onyx Capital Group. "Russians have been very good at circumventing these kinds of sanctions."

Kremlin spokesperson Dmitry Peskov said on Friday that Russia had built up a certain immunity to Western sanctions.

The EU sanctions followed U.S. President Donald Trump's threats last week to impose sanctions on buyers of Russian exports unless Russia agrees to a peace deal within 50 days.

ING analysts said the part of the package likely to have an impact is the EU import ban on refined oil products processed from Russian oil in third countries, though it said it could prove difficult to monitor and enforce.

Iran, another sanctioned oil producer, is due to hold nuclear talks with Britain, France and Germany in Istanbul on Friday, an Iranian Foreign Ministry spokesperson said on Monday. That follows warnings by the three European countries that a failure to resume negotiations would lead to international sanctions being reimposed on Iran.

In the U.S., the number of operating oil rigs fell by two to 422 last week, the lowest total since September 2021, Baker Hughes (NASDAQ:BKR) said on Friday.

U.S. tariffs on European Union imports are set to kick in on August 1, though U.S. Commerce Secretary Howard Lutnick said on Sunday that he was confident the United States could secure a trade deal with the bloc.

"Tariff concerns will continue to weigh in the lead up to the August 1 deadline, while some support may come from oil inventory data if it shows tight supply," said IG market analyst Tony Sycamore.

Source: Investing.com