Brent rises on prospect of tighter Russian oil sanctions
The front-month ICE Brent contract has gained $2.17/bbl on the day from Friday, to trade at $70.88/bbl at 09.00 GMT.
IMAGE: Getty Images
Upward pressure:
Brent crude’s price has risen sharply amid growing speculations of further US sanctions on Russian crude oil, potentially disrupting global supply flows.
US President Donald Trump said yesterday that he will send air defense missiles to Ukraine, Reuters reports. He is expected to make a “major statement” on Russia later today, the report adds.
“The [oil] market appears focused on uncertainty around President Trump’s scheduled 'major statement' related to Russia,” two analysts from ING Bank note.
Last week, a bipartisan sanctions bill targeting Russia’s energy sector had advanced in the US Congress, Reuters adds. The bill now needs backing from Trump.
“This could dramatically shift the oil outlook if sanctions target Russian energy,” ING Bank analysts add.
Meanwhile, diplomats from the European Union (EU) are close to finalising another package of sanctions against Moscow, reducing price cap on Russian crude oil, the news agency reports citing four EU sources following a meeting yesterday.
Downward pressure:
Brent’s rally lost steam after the Paris-based International Energy Agency (IEA) revised its 2025 global oil demand outlook downward again.
The IEA now expects global oil demand to grow by 700,000 b/d in 2025, slightly lower than its previous estimate.
Oil demand growth is expected to hit its lowest rate since 2009, “with the exception of the 2020 Covid year,” according to the IEA. It attributes slow demand growth to lacklustre demand in emerging market economies.
By Aparupa Mazumder
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