Oil Rises After EU Sanctions, Market Heated by Trump's Threats & Supply Crisis
World oil prices rose again after the European Union announced its 18th package of sanctions against Russia. At 13:27 GMT, Brent crude rose 68 cents (1%) to $70.20 per barrel, while US WTI rose 81 cents (1.2%) to $68.35. This increase was also accompanied by a surge in low-sulfur gas oil futures, which reached a 17-month high.
Why did prices rise?
The market was responding to the latest EU sanctions, which lowered the purchase price ceiling for Russian crude oil by G7 countries to $47.6 per barrel and banned imports of refined petroleum products from Russia. In addition, the EU designated Rosneft's refinery in India as a target for sanctions, sparking concerns about fuel supplies to Europe. The surge in gas oil prices of $3.50 to $27.27 above Brent reflects a potential shortage of diesel and jet fuel supplies in the region.
Who is affected and how?
India and Turkey—which have long been major suppliers of diesel and jet fuel to Europe—are directly impacted. India is the largest importer of Russian crude oil, and some of the refined fuel from its refineries will now have limited access to the European market. As a result, supplies to Europe could be disrupted and regional energy prices could rise.
What is the market waiting for?
Investors are now awaiting confirmation from the United States. President Trump has threatened additional sanctions against countries that continue to buy Russian oil if there is no progress on a peace deal within the next 50 days. However, the US has not yet fully supported the latest EU sanctions, raising questions about the enforcement of these policies. Analysts also believe the impact of lowering the price cap could be limited if logistics and enforcement are not robust.
What is the outlook for the future?
Although the Iraqi government has stated that it will soon resume oil exports from the Kurdistan Region, a Reuters report indicates that shipments are unlikely to begin anytime soon. This adds pressure to the global supply side. Against the backdrop of sanctions, potential logistical disruptions, and geopolitical tensions, the oil market is likely to remain volatile in the near future.
Source: (ayu-newsmaker)
