Oil Prices Surge Amid US Sanctions Targeting Russian Oil Sector
Global oil prices experienced a significant jump following the United States’ new sanctions against key Russian oil companies ‘Rosneft’ and ‘Lukoil’.
On Thursday, oil prices rose by approximately 5%, reaching a two-week high, in response to measures aimed at restricting Russian oil exports as part of international efforts to respond to the ongoing conflict in Ukraine.
According to Reuters, futures for Brent crude increased to $65.50 per barrel—a rise of $2.91 or 4.7%—while WTI crude prices climbed to $61.39 per barrel, gaining $2.89 or 4.9%.
This marks the highest close for Brent since October 8 and for WTI since October 9.
Meanwhile, US diesel futures jumped over 5%, increasing the diesel crack spread to the highest level since February 2024, indicating improved profitability for refining operations.
Energy sector analysts note that Russian producers are expected to seek alternative buyers to avoid exclusion from Western banking and trade systems due to sanctions.
While Chinese companies have already ceased purchases of Russian oil because of US sanctions, India has become the main importer of discounted Russian crude, raising concerns about future supply stability globally.
Industry experts suggest that, despite sanctions, Russia continues to find ways to mitigate impacts, maintaining stable production levels.
OPEC+ countries are also prepared to compensate for potential shortages by adjusting their output.
Diplomatic initiatives, such as China’s Deputy Prime Minister’s upcoming visit to the US, signal attempts by the two largest economies to de-escalate tensions and stabilize energy markets.
Additionally, the UK and EU introduced new sanctions targeting Russian energy, including bans on Russian LNG imports and restrictions on specific refineries, adding further uncertainty to global oil supplies.
Analysts predict that in 2024, oil prices will fluctuate within the range of $60–70 per barrel, depending on geopolitical developments and economic factors worldwide.