Oil Hits $79 as US Sanctions Russian Energy Sector
Crude oil prices reached a three-month high on January 10, 2025. Brent crude jumped 3.69% to $79.76 per barrel after the US announced major sanctions against Russia’s oil industry.
The measures target over 180 entities, including major producers Gazprom Neft and Surgutneftegas, affecting 42% of Russia’s seaborne oil exports.
The U.S. Treasury Department’s sanctions impact entities that handled 530 million barrels of Russian crude exports last year. The restrictions target oil tankers, traders, oilfield service providers, and insurance companies.
“These sanctions could reduce Russian oil supply by 150,000 barrels daily from late March,” stated Goldman Sachs oil analyst Sarah Chen during an energy conference.
In addition, market pressures intensify amid OPEC+ production cuts and increased heating oil demand in Europe and the U.S. WTI crude for February delivery rose 3.53% to $76.57 per barrel.
Citi revised its Q1 2025 forecasts, projecting Brent crude at $71 per barrel and WTI at $67, citing potential supply disruptions. The measures may force Russia to reorganize its export chain, potentially leading to 10-15 million barrels in floating storage by March.
Major buyers China and India face challenges avoiding sanctioned entities. Market observers anticipate continued volatility as global oil trade adapts to these restrictions throughout 2025.
