Oil prices edged lower on Wednesday as traders weighed the US Federal Reserve’s upcoming interest rate decision against supply risks linked to the Russia-Ukraine war.
Brent crude fell 0.2% to $68.05 per barrel, while US benchmark West Texas Intermediate (WTI) eased 0.01% to $64.08.
The Fed is widely expected to cut rates by 25 basis points later in the day, with markets watching Chair Jerome Powell’s remarks and new economic projections for guidance on the policy outlook. Analysts noted that while lower borrowing costs could support demand, a global supply surplus remains likely as OPEC+ continues to raise output.
EU Targets Russian Fuel
Meanwhile, geopolitical risks remain in focus after European Commission President Ursula von der Leyen announced plans to accelerate the EU’s phase-out of Russian fossil fuel imports. The move will be part of the bloc’s forthcoming 19th sanctions package against Moscow.
“Russia’s war economy, sustained by revenues from fossil fuels, is financing the bloodshed in Ukraine. To put an end to it, the Commission will propose speeding up the phase-out of Russian fossil imports,” von der Leyen said on X following a call with US President Donald Trump.
Trump has repeatedly criticised European allies for what he described as “not tough enough” sanctions, pointing to continued Russian oil purchases. In response to sanctions, Russia has increased oil exports to China and India. The EU has pledged to completely phase out Russian oil and gas imports by January 1, 2028.
The latest sanctions package is expected to target Russia’s banking sector, energy revenues, and cryptocurrency use to evade restrictions. Since the start of the war in February 2022, the EU has banned imports of Russian coal and most crude oil while imposing sweeping financial sanctions.
US Inventories Decline
On the supply side, the American Petroleum Institute reported on Tuesday that US crude stockpiles fell by 3.42 million barrels in the week ending September 12, alongside a drawdown in gasoline inventories. Official Energy Information Administration figures are due later Wednesday.
