Brent Nears $80 Per Barrel on Fresh Russian Sanctions

By Adedapo Adesanya

Brent neared the $80 price mark on Friday, gaining $2.84 or 3.7 per cent to sell fr $79.76 per barrel as traders braced for supply disruptions from the broadest US sanctions package targeting Russian energy revenue.

President Joe Biden’s administration imposed fresh sanctions on Russian oil producers, tankers, intermediaries, traders, and ports, aiming to affect every stage of Russia’s oil production and distribution chains.

The move is meant to cut Russia’s revenues for continuing the war as the sanctions also include networks that trade petroleum.

According to the US Government, close to 180 vessels, several senior Russian oil executives, dozens of traders and two major oil companies were targeted by the sanctions.

Many of the sanctioned tankers have been used to ship oil to India and China as a price cap imposed by the Group of Seven countries in 2022 has shifted trade in Russian oil from Europe to Asia. Some tankers have shipped both Russian and Iranian oil.

This followed US sanctions in November on banks including Gazprombank, Russia’s largest conduit to the global energy business, and earlier last year on dozens of tankers carrying Russian oil.

Market analysts note that India and China, which have always patronised Russia, will have to find alternatives.

This move just a few days before President-elect Donald Trump’s inauguration, making it likely that he will keep the sanctions in place and use them as a negotiating tool for a Ukraine peace treaty.

Oil prices were also buoyed as extreme cold in the US and Europe has lifted demand for heating oil while fire rages on in California affecting supply.

JPMorgan analysts said in a note on Friday that the weather in the US could record a significant year-over-year increase in global oil demand of 1.6 million barrels a day in the first quarter of 2025, primarily boosted by demand for heating oil, kerosene, and Liquified Petroleum Gas (LPG), by-products of crude oil.