Oil prices surged nearly 3% to their highest levels in three months on Friday following the U.S. administration’s announcement of its most extensive sanctions targeting Russian oil and gas operations. These measures aim to disrupt every stage of Russia’s oil production and distribution chain, from producers and traders to ports and tankers. Brent crude futures rose 3.7% to $79.76 per barrel, briefly crossing $80, while West Texas Intermediate (WTI) crude futures climbed 3.6% to $76.57 per barrel.
The sanctions are expected to severely impact Russian oil exports to major buyers India and China, forcing them to seek alternatives and potentially driving up global oil prices. Analysts noted the sanctions could serve as leverage for a Ukraine peace deal under the incoming U.S. administration.
Additional factors supporting oil prices included increased demand for heating oil due to extreme cold weather in the U.S. and Europe. U.S. ultra-low sulfur diesel futures, often used for heating, rose 5.1% to $105.07 per barrel, the highest since July. JPMorgan analysts project a year-over-year global oil demand increase of 1.6 million barrels per day in Q1 2025, driven by higher consumption of heating oil, kerosene, and LPG.
