Oil prices are regaining momentum after months of sluggish movement, fueled by growing expectations of heavy US sanctions on Russia
Oil prices: After a subdued price trajectory last year, many had expected the plunge to continue. However, crude oil prices are gaining momentum once again, largely driven by growing expectations around the US imposing heavy sanctions on Russia. This has eventually pushed the price levels of the commodity to a three-month high.
On Monday, the WTI (West Texas Intermediate) crude oil index surged to $78.03, up by nearly 1.91%. Whereas, Brent crude futures surpassed the $81 per barrel level mark.
While Trump's policy stance on the black commodity had already sent shockwaves across oil-producing nations and the larger OPEC group (Organisation of the Petroleum Exporting Countries), the Biden administration's recent call for sanctions has added another layer of tension.
Just last week, the Biden administration introduced a new set of sanctions targeting Russia's oil and gas revenue, as this was seen as a financial source used to fund its ongoing war in Ukraine.
These new measures are being implemented by the US Treasury, as per a report by Reuters, to impose sanctions on Russia's biggest oil companies, such as Gazprom Neft and Surgutneftegas. This will also include additional 183 ships involved in transporting Russian oil.
These sanctions will be a major concern for not just Russia, but China and India as well which are among the top oil importing nations. Just last year, India had surpassed China to become Russia's top oil buyer in August. And this had a lot to do with China's economic trajectory that was slowing down alongside a weaker demand play.
The new sanctions will make it harder for Russia to export oil, which will eventually push nations like India and China to source more oil from OPEC+ and the US. This is expected to further push the price of oil upwards in the coming months.
This might also come as a major relief factor for oil producing nations as the price of the commodity had dropped below $65 per barrel last year.