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WTI at $77.00, 3-month highs after US sanctions on Russian oil

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The benchmark West Texas Intermediate (WTI) extended gains for the third consecutive session during Asian trading hours on Monday, hovering above $77.00 per barrel, near $77.46 — a level not seen since October 8.

Crude oil prices continue to climb amid growing concerns over potential supply disruptions triggered by new US sanctions on Russian oil.

On Friday, the US Treasury introduced broader sanctions on Russian oil, targeting producers GazpromNeft and Surgutneftegas, as well as 183 vessels involved in transporting Russian crude.

These restrictions are expected to significantly disrupt Russia’s ability to supply crude oil to key markets like China and India, compelling these countries to explore alternatives in regions such as the Middle East, Africa and the Americas.

RBC Capital analysts, as reported by Reuters, noted in a statement that, “the new Russian sanctions from the outgoing administration represent a net addition to at-risk supply, introducing more uncertainty to the first-quarter outlook.”

The latest round of sanctions targets ships involved in 1.5 million barrels a day of seaborne Russian crude oil activity on average in 2024. This includes 750,000 bpd of exports to China and 350,000 bpd to India.

Additionally, crude oil demand has risen following a stronger-than-expected US NFP jobs report released on Friday, which signaled economic strength.

In recent weeks, crude prices have been further supported by increased winter energy demand, declining US inventories, and speculation surrounding the policies of President-elect Donald Trump’s incoming administration.

(Source: OANDA)