Financial reports and news articles analyzing impact on oil companies

Oil Hits $81 as U.S. Sanctions on Russia Disrupt Supplies to China and India

Jan 13, 2025, 10:06 AM

Oil prices surged to five-month highs as new U.S. sanctions targeting Russia's energy sector threaten to disrupt global oil supplies. The sanctions, announced by the outgoing Biden administration on January 10, are the most aggressive yet, targeting major Russian oil exporters, over 150 tankers, insurers, and energy officials. The measures are expected to curb Russia's crude exports to key buyers China and India. Chinese and Indian refiners are scrambling to source more oil from the Middle East, Africa, and the Americas to replace Russian supplies. Several tankers carrying over 2 million barrels of Russian crude are idling off the coast of China after being sanctioned by the U.S., according to Bloomberg data. In addition, at least 65 tankers have anchored in Asia, Russia, and the Middle East following the sanctions. India is set to reject oil tankers sanctioned by the U.S., and Indian banks are requiring certificates of origin to ensure compliance. Brent crude rose over 3% to trade above $81 per barrel, its highest level since August, while West Texas Intermediate climbed above $78 per barrel. Goldman Sachs and Morgan Stanley have revised their oil price forecasts upwards, with Morgan Stanley raising its Brent projection for the first quarter to $77.5 per barrel from $72. The Kremlin warned that the new sanctions would destabilize global energy markets. The U.S. measures are adding uncertainty to the oil market and could erase the expected surplus for this year, according to analysts.