The United States has implemented some of the strictest sanctions against the Russian oil industry. Anticipating these sanctions, global oil prices surged to $80 per barrel, leading to a collapse in the shares of Russian oil companies. Reports TSN. This was confirmed by Kontrakty.UA.
As reported by Reuters.
Brent crude oil futures closed at $79.76 per barrel, rising by $2.84, or 3.7%, surpassing the $80 mark for the first time since October 7.
WTI crude oil futures increased by $2.65 (3.6%), reaching $76.57 per barrel, marking a three-month high.
At the session's peak, both contracts exhibited an increase of more than 4% following the circulation of documents detailing new sanctions in Europe and Asia.
According to sources in Russian oil trading and Indian refining, the restrictions will significantly disrupt the supply of Russian oil to key buyers — India and China.
UBC analyst Giovanni Staunovo predicts a decrease in Russian oil exports and an increase in prices. He also noted that the sanctions could serve as a tool to pressure Moscow in potential peace negotiations.
"We expect global oil demand to rise by 1.6 million barrels per day in the first quarter of 2025 due to increased demand for fuel oil, kerosene, and liquefied gas," the JPMorgan analysts stated.
Background
The U.S. announced new sanctions against several leading companies in Russia's oil and gas sector. Additionally, dozens of vessels from the "shadow fleet" and a significant list of government officials are also affected by the new restrictions.
President Volodymyr Zelensky expressed gratitude to 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 war machine by disrupting supply chains: key Russian producers, insurance companies, service providers in the oil and gas sector, 184 tankers from the shadow fleet, logistical facilities, and third-party companies," he stated.
It is expected that U.S. sanctions against the Russian energy sector will drastically reduce Russia's revenues that fund 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 our actions to cost Russia billions of dollars each month," said White House advisor John Kirby.
Until now, hundreds of vessels and many Russian oil traders have managed to evade the strictest U.S. sanctions, as the Biden administration sought to balance the need for increased sanctions with preventing a global rise in oil prices.