Brent crude oil price data from financial news outlets like Bloomberg or Reuters

US Sanctions on Russia's Oil Sector Push Prices Above $81, Disrupting China and India's Imports

Jan 13, 2025, 03:01 PM

The United States has imposed the most sweeping and aggressive sanctions yet on Russia's energy sector, targeting oil production and exports. The sanctions include measures against major Russian oil companies such as Gazprom Neft and Surgutneftegas, and 183 tankers involved in transporting Russian crude oil—affecting about 45% of Russia's seaborne crude exports. This move has caused significant disruptions in the global oil market, with oil prices surging to five-month highs. Brent crude rose above $81 per barrel, while U.S. crude futures reached over $77.96 per barrel. Natural gas prices also surged, with U.S. natural gas futures rising over 6% to $4.23 per MMBTU. Key importers of Russian oil, including China and India, are facing challenges as ports and companies refuse to handle sanctioned vessels. Chinese port operator Shandong Port Group has banned US-sanctioned vessels from entering its harbors, and at least 65 tankers have dropped anchor in the region. Oil tanker rates have soared due to the sanctions. As a result, Chinese and Indian refiners are seeking alternative sources of crude, potentially increasing reliance on supplies from the Middle East, Africa, and the Americas. Analysts predict the tightened sanctions could push oil prices over $85 per barrel. The new sanctions are expected to reduce Russia's oil exports significantly, potentially pushing oil prices even higher.