Oil prices reach new high: Sanctions against Russia affect the market

The oil market recorded a remarkable increase on Monday as concerns about potential supply disruptions in major importing countries such as China and India grew, due to the comprehensive sanctions against Russian crude oil. Both West Texas Intermediate (WTI) and Brent crude oil futures continued their upward trend. WTI oil rose by about 3% and traded above $79 per barrel, the highest level since August. Brent futures also exceeded the $81 mark. The recent price increase follows a nearly 4% rise on Friday, triggered by the comprehensive sanctions imposed by the U.S. against Moscow. These measures target oil managers, traders, and over 180 ships, bringing the total number of sanctioned ships to 451. A report from JPMorgan notes that both India and China are becoming increasingly cautious about purchasing Russian oil, particularly when it is transported by sanctioned tankers or ships covered by Russian insurers. Despite the current price increase, the team led by Natasha Kaneva at JPMorgan predicts that the average Brent price will be $73 in 2025. Since the beginning of the year, oil prices have shown an upward trend, with WTI increasing by almost 8% and Brent by about 7%. This is primarily due to colder than expected temperatures and declining inventories. Antonio Di Giacomo from XS.com recently stated that the low temperatures are boosting energy demand for heating purposes, thereby increasing the consumption of fossil fuels. The Organization of the Petroleum Exporting Countries and its partners, known as OPEC+, have announced their intention to bring additional amounts to the market throughout the year by gradually reversing their production cuts. This measure had been postponed several times last year.