CNBC reported that on January 10, oil prices increased sharply after the US Treasury Department announced sweeping sanctions against the Russian oil industry, shaking the global energy market.
Brent crude rose $2.84, or 3.69%, to $79.76 a barrel, while U.S. West Texas Intermediate (WTI) crude rose $2.65, or 3.58%, to $76.57 a barrel. This was the highest price since October, reflecting market concerns about major fluctuations.
The sanctions target major Russian oil companies Gazprom Neft and Surgutneftegaz, along with more than 180 tankers and many officials and leaders in the Russian energy industry, including Gazprom Neft CEO Aleksandr Valeryevich Dyukov.
According to the US Treasury Department, the sanctioned vessels are mainly part of Russia's "shadow fleet" - a group of ships that have evaded previous sanctions to continue exporting oil.
“The United States is taking comprehensive action to target Russia’s main source of revenue – the financing of the war in Ukraine. With these measures, we are increasing sanctions on the Russian oil trade,” said US Treasury Secretary Janet Yellen.
Energy markets faced turmoil as analysts predicted that sanctions would force India and China - two major buyers of Russian oil - to seek supplies from the Middle East, pushing oil prices even higher.
“The Biden administration’s aggressive sanctions have taken the oil market by surprise, which had previously been playing down the risk,” said Bob Yawger, managing director of energy at Mizuho Securities.
The Biden administration is stepping up pressure on Russia and supporting Ukraine ahead of President-elect Donald Trump's inauguration, which is expected to take a softer line toward Moscow.
“The Trump team’s response to these sanctions will be a key factor in determining whether the oil price risk persists,” said Bob McNally, president of Rapidan Energy Group.
For his part, Russian President Vladimir Putin affirmed that Western sanctions were "useless" and that Russia had overcome this pressure.
With sweeping sanctions, global energy markets continue to face the risk of rising prices while Russia pledges not to back down. The confrontation between the US and Russia is pushing geopolitical tensions to a new level, with unpredictable implications for the world economy.
