Oil prices settled higher on Tuesday after a choppy session as traders weighed the impact of Western sanctions on Russian oil flows, as well as U.S. President Donald Trump saying his administration had started interviewing for the next Federal Reserve chair.

Brent crude settled up 69 cents, or 1.07%, at $64.89 a barrel. U.S. West Texas Intermediate crude was up 83 cents, or 1.39%, to $60.74.

U.S. crude futures briefly rose by more than $1 a barrel in afternoon trade to a session high of $60.92 after Trump announced the Federal Reserve chair interviews. Trump has been vocally critical of current Chair Jerome Powell for holding interest rates steady.

"I think this news is supportive of the market because it is obvious what kind of person Trump will bring in for that job. This gave a risk-on type of nudge to the market," said John Kilduff, partner with Again Capital.

Lower borrowing costs typically boost demand for oil and push prices higher.

The U.S. Treasury said sanctions imposed in October on Rosneft and Lukoil are already squeezing Russia's oil revenue and are expected to curb its export volumes over time.

"Traders weighed the impact of a growing global surplus against U.S. sanctions that are disrupting Russian crude flows," said MUFG analyst Soojin Kim.

A senior White House official said Trump was willing to sign Russian sanctions legislation as long as he retains final authority over its implementation.

Trump said on Sunday that Republicans were drafting a bill to impose sanctions on any country doing business with Russia, adding that Iran could also be included.

"This Russia sanctions legislation they are kicking around is exactly the type of secondary sanctions that could make a real difference. The risk of losing Russian supplies is supportive and it has the attention of the market," said Kilduff.

Russia's Novorossiysk port resumed oil loadings on Sunday after a two-day suspension triggered by a Ukrainian missile and drone attack, according to two industry sources and data compiled by LSEG.

Exports from Novorossiysk and a nearby Caspian Pipeline Consortium terminal, together representing about 2.2 million barrels per day, or roughly 2% of global supply, were halted on Friday, pushing crude prices up more than 2% that day.

Oil prices are expected to decline through 2026, Goldman Sachs said on Monday, citing a supply wave that keeps the market in surplus. However, it noted that Brent could rise above $70 a barrel in 2026/2027 if Russian output falls more sharply.

Source: Investing.com