Oil prices rose to a three-month high on Friday, as traders digested sweeping new sanctions against Russia as the Biden Administration tries to block Moscow from receiving crude oil revenues amid the ongoing war in Ukraine.
West Texas Intermediate crude (CL=F) rose as much as 4% to $77 a barrel before paring gains, while Brent crude futures (BZ=F), the international price benchmark, gained 2% to reach $80, the highest level since October. .
The sanctions included more than 180 vessels, two oil companies, traders, insurers and senior Russian executives.
“The United States is taking sweeping action against Russia’s key source of revenue to finance its brutal and illegal war against Ukraine,” Treasury Secretary Janet Yellen said in a statement.
Oil prices were already in an uptrend since late December, and traders were uncertain about President-elect Trump’s policy toward Iran. Tehran currently produces more than 3 million barrels of crude oil per day.
“News about [the] “The Trump administration’s tough stance on Iran may come very quickly,” Dennis Kissler, senior vice president at BOK Financial, said in a note to clients on Friday.
“Add to that the freezing temperatures in most of the United States, combined with the decline in the number of reserves, crude oil has now become a new ‘fund favorite,'” he added.
JPMorgan analysts said global oil demand is expected to remain strong through January due to colder-than-expected weather in the Northern Hemisphere that will “boost heating oil consumption” and early travel activities in China. for the country’s Lunar New Year holiday.
Despite Friday’s sharp rise, many analysts expect oil prices to be lower this year than in 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 to $80 per barrel for spot Brent crude. That would be below of the range of 70 to 90 dollars per barrel that will dominate the year 2024,” a note from the Eurasia Group stated on Thursday.
Inés Ferré is a senior business reporter at Yahoo Finance. Follow her on X in @ines_ferre.
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