The United States has implemented some of the strictest sanctions against the Russian oil industry. In anticipation of these sanctions, global oil prices surged to $80 per barrel, leading to a sharp decline in the stocks of Russian oil companies. Reports TSN. This information is provided by Kontrakty.UA.
This is reported by Reuters.
Brent crude oil futures closed at $79.76 per barrel, rising by $2.84, or 3.7%, crossing the $80 per barrel mark for the first time since October 7.
Futures for American crude oil, WTI, increased by $2.65 (3.6%), reaching $76.57 per barrel, which also marks a three-month high.
At the peak of the session, both contracts showed an increase of more than 4% following the spread of documents detailing new sanctions across Europe and Asia.
According to sources in the Russian oil trading sector and Indian oil refining, the restrictions will significantly disrupt the supply of Russian oil to major buyers — India and China.
UBC analyst Giovanni Staunovo anticipates a decrease in Russian oil exports and a rise in prices. He also noted that sanctions could serve as a pressure tool on Moscow in the context of potential peace negotiations.
"We expect global oil demand to increase by 1.6 million barrels per day in the first quarter of 2025 due to heightened demand for fuel oil, kerosene, and liquefied gas," stated a note from JPMorgan analysts.
Background
The U.S. announced new sanctions against a number of leading companies in the Russian oil and gas industry. Additionally, dozens of ships from the "shadow fleet" and a significant list of government officials were also targeted by the new restrictions.
President Volodymyr Zelensky thanked Biden for the announced package of sanctions against over 400 entities linked to the Russian energy sector.
"These measures significantly undermine the financial foundation of the Russian military machine, as they disrupt the supply chain: key Russian producers, insurance companies, service providers in the oil and gas sector, 184 tankers from the shadow fleet, logistical facilities, and companies from third countries," he stated.
It is expected that U.S. sanctions against the Russian energy sector will substantially reduce Russia's revenue, which funds its war against Ukraine, forcing the Kremlin regime to lose billions of dollars each month.
"These sanctions target both Russian oil and LNG, and we expect that our actions will cost Russia billions of dollars each month," said White House advisor John Kirby.
Until now, hundreds of vessels and many Russian oil traders had managed to avoid the strictest U.S. sanctions, as the Biden administration sought to balance the need for stronger sanctions with preventing a global rise in oil prices.