Brent rises as sanctions tighten on Russia
The front-month ICE Brent contract has gained by $3.20/bbl on the day, to trade at $65.59/bbl at 09.00 GMT.
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Upward pressure:
Brent crude’s price has moved higher amid escalating tensions between the West and Russia.
The US Treasury Department has sanctioned two of Russia’s biggest oil companies – Rosneft and Lukoil.
Rosneft and Lukoil “produce more than 5m b/d [5 million b/d] of oil,” remarked ING Bank’s head of commodities strategy Warren Patterson. “Clearly, the concern for the market is oil flows from Russia,” he said.
Meanwhile, the European Union has adopted the 19th package of economic sanctions against Russia, targeting another 118 vessels from, bringing the total to more than 560.
These vessels “form part of Russia’s shadow fleet and reportedly two independent Chinese oil refineries,” Patterson added.
Downward pressure:
Oversupply concerns continue to be a key factor limiting Brent’s upward momentum.
More than 1 billion bbls of oil are in transit at the moment, data from tanker tracking firm Vortexa showed earlier, adding some bearish sentiment to the market.
This rise marks the highest level reached since 2020 – during the COVID-19 era, a Bloomberg report said.
Meanwhile, OPEC+ countries have continued to raise output ahead of their planned schedules.
Earlier this month, eight members of the group agreed to collectively increase their production by another 137,000 b/d in November.
By Aparupa Mazumder
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