WTI rallies sharply as sanctions bite – $66 back on the cards

West Texas Intermediate (WTI) crude is surging this morning, up around 2.8% to trade just above US$61.90/bbl, following overnight reports that the U.S. administration has imposed sanctions on Russian oil majors Rosneft and Lukoil. The move — targeting producers with combined output exceeding 5 million barrels per day — has reignited concerns over global supply disruptions and injected a fresh dose of bullish sentiment into the oil market.

While traders remain cautious given the limited impact of similar sanctions earlier this year, the geopolitical tone has clearly shifted. This round of measures appears broader and more coordinated, especially with the EU’s 19th sanctions package now approved — which includes bans on 117 tankers, two independent Chinese refiners, and Russian LNG imports by 2027. Together, these steps suggest a firmer Western stance on restricting Russian energy flows.

Technical outlook: Bulls target $66 resistance

From a technical perspective, WTI is breaking higher off key support around $56–$57, a zone that’s been tested multiple times since April. The recent bounce shows strong momentum, with price action now carving a sharp V-shaped recovery on the 4-hour chart.

Immediate resistance lies at $62.50, followed by a significant supply zone between $65.50 and $66.00 — an area that capped rallies through late September. A sustained close above $62 could open the path toward that upper range, with the $66 handle back firmly on the radar.

Momentum indicators are turning decisively bullish, suggesting room for further appreciation as market “noise” around sanctions and shipping flows settles. Volume on this breakout is notably higher than average, reinforcing the conviction behind this move.

Fundamental undercurrent: Sanctions fuel short-term bid

Beyond the charts, the fundamental narrative adds fuel to the rally. Even if Russian barrels continue finding buyers in Asia, logistical constraints and insurance restrictions from the new sanctions may tighten spot supply. Additionally, refined product exports from Russia could face indirect pressure, prompting speculative buying in crude futures.

With OPEC+ output cuts still in play and U.S. inventory data expected midweek, sentiment is skewing bullish. Traders are now watching for follow-through — if the rally holds above $60, momentum buyers could drive a test of $66 before the week’s end.

Bottom line

The market has swiftly repriced geopolitical risk, with traders eyeing $66 as the next technical milestone. Provided this momentum persists and global risk sentiment stabilises, the rally could extend until the sanctions story finds clarity. For now, the path of least resistance is higher.