Oil markets in the trading hours of Asian markets experienced a significant boost on Monday, continuing the upward trend from last week as investors assessed the potential disruptions in supply due to strict sanctions imposed by the United States on Russian oil exports.
As of 10:00 BKK time (GMT+7), Brent futures rose to $80.95 a barrel with a 1.49% increase, while WTI futures for March delivery surged by 1.71%, reaching $77.88 per barrel. These gains followed a nearly 3% rally on Friday, marking a three-month peak.
The Biden administration unveiled one of its most extensive sanctions packages against Russian oil and gas, a strategic move intended to undermine revenue streams suspected of financing Moscow’s military actions in Ukraine.
The new US Treasury measures target prominent Russian oil entities like Gazprom Neft and Surgutneftegas PJSC and 183 vessels involved in oil transportation. The expected disturbance in Russian oil exports is prompting major importers, such as China and India, to explore alternative sources from regions including the Middle East and the Americas, which is likely to drive up global oil costs and affect shipping rates.
The possibility of intensified demand due to a cold wave gripping essential energy markets in the US and Europe is also underpinning the rise in oil prices. With brisk heating requirements in several key areas, notably those dependent on natural gas and fuel oil, distillate inventories have seen a considerable drawdown.
As analysts evaluate this environment, they expect Russia might need to offer its crude at more competitive prices to retain market share. Meanwhile, OPEC+ members are monitoring supply strategies that could influence market stability during the winter season.
