Oil Rises Over 5% as U.S. Sanctions Hit Russian Energy Giants
Oil prices climbed sharply on Thursday, rising more than 4% after the United States imposed new sanctions on Russian energy giants Rosneft and Lukoil over the ongoing war in Ukraine.
Brent crude futures gained $2.71, or 4.3%, to $65.30 a barrel at 0841 GMT, while U.S. West Texas Intermediate (WTI) crude rose $2.56, or 4.4%, to $61.06. The surge extended Wednesday’s gains, driven by concerns over supply disruptions as the sanctions target two of Russia’s largest oil exporters.
“Crude prices jumped after the U.S. sanctions were rolled out, and refineries in China and India will now need to seek alternative suppliers to avoid exclusion from the Western banking system,” said Saxo Bank analyst Ole Hansen.
The U.S. said it was prepared to take further action and urged Moscow to agree to an immediate ceasefire. The move follows Britain’s sanctions on Rosneft and Lukoil last week, while EU countries have approved a 19th package of sanctions that includes a ban on Russian LNG imports.
Industry sources said Indian refiners are expected to “sharply curtail imports of Russian oil due to the new sanctions,” with Reliance Industries reportedly planning to reduce or halt such imports completely.
However, some analysts cautioned that the impact on global oil supply may be limited. “So far, almost all the sanctions against Russia for the past 3.5 years have mostly failed to dent either the volumes produced by the country or the oil revenues,” said Rystad Energy analyst Claudio Galimberti.
Prices also drew support from a surprise drop in U.S. crude stockpiles, signalling stronger refining activity and demand, according to the Energy Information Administration.
