U.S. sanctions crackdown: oil hits $80+, highest since August
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New U.S. sanctions against Russia boost oil prices, with Brent crude at $81.24 a barrel. Russian exports could fall, with India and China forced to seek other suppliers. Sanctions target Russian companies and vessels involved in oil transportation. Forecasts indicate increased demand for crude oil, with Brent prices potentially above $70 to $85 in the short term.
The new wave of sanctions for Russia unveiled Friday by the Biden administration gives markets a jolt and drives up the price of oil. Only a week before Trump takes office in the White House, Brent rises 1.86% to $81.24 a barrel, the highest value in four months and the highest since Aug. 27. WTI also rose 2% to $78.10 per barrel, down from its highest value of $78.39 per barrel on Oct. 8.
Impact on exports and new market balance
The expected impact is that sanctions may affect Russian exports to major trading partners India and China, thus forcing them to buy from other suppliers and tipping the balance in the market. Gone is the U.S. caution since there is no longer a supply deficit, in fact, the market sees a surplus in crude oil production in Guyana, Brazil, Canada and the Middle East and the U.S.
Companies under the crosshairs of sanctions are Russia's Surgutneftegas and GazpromNeft, which exported a total of 970,000 barrels of crude oil per day in 2024. But also 183 vessels that transported Russian oil, with the idea of targeting Moscow's revenue to finance its war against Ukraine and limit its access to international markets.
Predictions
Citi Research and JP Morgan agree that demand for crude oil is expected to rise as temperatures tighten, and according to Goldman Sachs, recent measures reinforce the idea that Brent prices, set between $70 and $85, are more likely to rise in the near term.
The new wave of sanctions for Russia unveiled Friday by the Biden administration gives markets a jolt and drives up the price of oil. Only a week before Trump takes office in the White House, Brent rises 1.86% to $81.24 a barrel, the highest value in four months and the highest since Aug. 27. WTI also rose 2% to $78.10 per barrel, down from its highest value of $78.39 per barrel on Oct. 8.
Impact on exports and new market balance
The expected impact is that sanctions may affect Russian exports to major trading partners India and China, thus forcing them to buy from other suppliers and tipping the balance in the market. Gone is the U.S. caution since there is no longer a supply deficit, in fact, the market sees a surplus in crude oil production in Guyana, Brazil, Canada and the Middle East and the U.S.
Companies under the crosshairs of sanctions are Russia's Surgutneftegas and GazpromNeft, which exported a total of 970,000 barrels of crude oil per day in 2024. But also 183 vessels that transported Russian oil, with the idea of targeting Moscow's revenue to finance its war against Ukraine and limit its access to international markets.
Predictions
Citi Research and JP Morgan agree that demand for crude oil is expected to rise as temperatures tighten, and according to Goldman Sachs, recent measures reinforce the idea that Brent prices, set between $70 and $85, are more likely to rise in the near term.