Oil prices hit their highest level in three months on Friday as traders digested radical new sanctions against Russia as the Biden administration attempts to cut off Moscow from gross revenues amid the ongoing war in Ukraine.
West Texas Intermediate crude (CL=F) rose 4% to $77 a barrel before paring gains, while Brent futures (BZ=F), the international benchmark, gained 2 % to reach 80 dollars, the highest level since October. .
More than 180 ships, two oil companies, traders, insurers and senior Russian executives have been targeted by the sanctions.
“The United States is taking sweeping action against Russia’s main source of revenue, which funds its brutal and illegal war against Ukraine,” Treasury Secretary Janet Yellen said. said in a statement.
Oil prices were already on an upward trend since late December as traders were uncertain about President-elect Trump’s policy toward Iran. Tehran currently produces more than 3 million barrels of crude per day.
“The news continues to filter in about [the] The Trump administration’s tough stance on Iran could come very quickly,” Dennis Kissler, senior vice president at BOK Financial, said in a note to clients on Friday.
“Add in freezing temperatures across much of the United States, as well as dwindling storage, and crude has now become a new ‘fund favorite,’” he added.
JPMorgan analysts said global oil demand was expected to remain strong through January due to colder-than-expected weather in the Northern Hemisphere, which is “boosting heating fuel consumption” and early travel to China to the occasion of the Lunar New Year holidays.
Despite Friday’s sharp rise, many analysts expect oil prices to fall this year compared to 2024.
“Despite ongoing geopolitical conflicts, a combination of bearish factors will likely keep oil prices structurally low in 2025, with a likely price range of $60-80 per barrel for Brent spot crude. dominated the year 2024″, indicates a note from the Eurasia Group on Thursday.
Ines Ferre is a senior economics reporter for Yahoo Finance. Follow her on @ines_ferre.
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