WTI price surges to three-month high following U.S. sanctions on Russian oil
WTI prices spikes to three-month high
West Texas Intermediate (WTI) oil traded near $77.00 per barrel on Monday, briefly reaching $77.46—the highest price since October 8—amid mounting concerns over potential supply disruptions due to US sanctions on Russia's oil sector. The price rally marks the third consecutive session of gains for crude oil as geopolitical tensions reshape global supply chains.
On Friday, the US Treasury implemented sweeping sanctions targeting Russian oil producers Gazprom Neft and Surgutneftegas, along with 183 vessels involved in the transportation of Russian crude. The sanctions are expected to hinder Russia's ability to supply key markets, particularly China and India. Analysts from RBC Capital highlighted that the latest restrictions impact approximately 1.5 million barrels per day (bpd) of seaborne Russian oil exports, with 750,000 bpd destined for China and 350,000 bpd for India.
USOIL price dynamics (Nov 2024 - Jan 2025) Source: TradingView.
Market impact and demand dynamics
The sanctions have compelled China and India to explore alternative suppliers in regions such as the Middle East, Africa, and the Americas. The disruption has added uncertainty to first-quarter market forecasts, with analysts anticipating further volatility in oil prices.
The upward momentum in crude prices was further supported by stronger-than-expected US jobs data released last Friday. The Nonfarm Payrolls report indicated a robust labor market, fueling optimism about sustained economic strength and increased energy demand. Additionally, winter-related energy consumption and declining US oil inventories have reinforced bullish sentiment.
Outlook: Volatility ahead amid geopolitical tensions
Market participants are closely monitoring developments surrounding President-elect Donald Trump’s incoming administration, which may introduce additional policy changes affecting the energy sector. The combination of tighter Russian supply and rising demand is likely to keep oil prices elevated, with traders preparing for potential price swings in the coming weeks.
In our previous analysis, we noted how WTI prices rose near $74 due to increased demand driven by cold weather and geopolitical concerns. This context remains relevant as sanctions and demand dynamics continue to influence market sentiment.
