A view of the offshore oil and gas platform Esther in the Pacific Ocean on January 5, 2025 in Seal Beach, California.
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Oil prices jumped more than 3%, Friday, with the US Treasury Department announcing broad sanctions on the Russian oil industry.
Brent rose $2.82, or 3.67%, to $79.74 per barrel by 10:32 a.m. EST, while US crude oil It rose $2.89, or 3.91%, to $76.81 per barrel.
The sanctions target Russian oil companies Gazprom Neft and Surgutneftegas and their subsidiaries, more than 180 oil tankers, and more than a dozen Russian energy officials and executives. Among the sanctioned executives is Gazprom Neft CEO Alexander Valerievich Dyukov.
The sanctioned ships are mostly oil tankers that are part of Russia's “shadow fleet” that has evaded existing sanctions on the country's energy exports, according to the Treasury Department.
“The United States is taking comprehensive action against Russia’s main source of revenue to fund its brutal and illegal war against Ukraine,” Treasury Secretary Janet Yellen said in a statement.
“With today’s actions, we increase the risks of sanctions associated with Russian oil trade, including shipping and financial facilities to support Russian oil exports,” Yellen said.
The perception in the oil market is that Indian and Chinese refiners that have imported Russian oil will have to scramble to get barrels from the Middle East, Bob Yawger, executive director of energy futures at Mizuho Securities, said in a note to clients on Friday.
The Biden administration is seeking to intensify pressure on Russia and provide assistance to Ukraine before President-elect Donald Trump takes office.
“The Biden administration has chosen to impose tougher energy sanctions, which has made the oil market particularly complacent about the risks of sanctions,” said Bob McNally, president of Rapidan Energy Group.
“Therefore, we expect today's material risk premium on Brent to adhere to pending signals from the Trump team on whether they will continue with these sanctions,” McNally said.
Brent crude futures, one year
This is a developing story. Please check back for updates.
