Crude oil prices continue to rise

The latest US sanctions on Russian oil and gas continue to push world oil prices up, causing Brent to reach a 5-month peak.

At the opening of the trading session on January 13, Brent crude oil prices increased by 1.8% to 81.21 USD per barrel. This morning, the price reached 81.46 USD - the highest since the end of August 2024.

WTI crude oil prices also rose 2% to $78.3, the highest level since early October 2024.

A crude oil facility in Kazakhstan. Photo: Reuters

The market has been rallying since late last week, as investors anticipated supply disruptions after the US imposed its largest-ever sanctions on Russian oil and gas. On January 10, the Biden administration imposed new sanctions targeting Russian oil companies, tankers, intermediaries, traders and ports. Major oil companies such as Gazprom Neft and Surgutneftegas, as well as 183 tankers carrying Russian oil, were on the list.

The US move will hit every stage of the Russian oil production and supply chain. Analysts say Russian oil exports will be severely impacted, forcing the world’s two top oil buyers, China and India, to shift to the Middle East, Africa and the Americas.

“India and China are rushing to find alternatives,” Anas Alhajji, director of energy consultancy Energy Outlook Advisors, said on social media X. Sanctions could make Russian oil exports more scarce and expensive, pushing up both oil prices and shipping costs.

The US move comes just over a week before President-elect Donald Trump takes office. Mr Trump is expected to keep the sanctions in place and could use them as a tool for peace negotiations with Ukraine.

Oil prices have also been rising due to cold weather in the U.S. and Europe, which has boosted heating demand, said Alex Hodes, an analyst at brokerage StoneX. Europe has been pushing renewable energy for years, but wind power still accounts for only about 20% of electricity consumption in the region.