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The price of oil has climbed sharply following America’s implementation of broader sanctions on Russian supplies, reaching its highest level in three months. The Biden administration’s latest sanctions, targeting major Russian oil companies Gazprom Neft and Surgutneftegas, alongside 183 tankers servicing India and China, have sent ripples through global energy markets.
Brent crude, the international benchmark, witnessed a significant jump of 2.3 per cent, or £1.83, reaching £81.6 per barrel, according to Intercontinental Exchange data. West Texas Intermediate similarly experienced an upward trajectory, rising 1.79 per cent to settle at £77.9 per barrel.
The coordinated sanctions effort between the US and Britain aims to disrupt what British Foreign Secretary David Lammy described as “the lifeblood of Putin’s war economy”. The measures extend to Russian maritime insurance providers, Ingosstrakh Insurance Company and AlfaStrakhovanie Group, both now facing restrictions from both nations.
The White House’s decision to implement these comprehensive sanctions was influenced by current oil market resilience. US Deputy National Security Adviser Daleep Singh emphasised that the market’s robust position minimised risks of unintentionally benefiting Russia through price increases that could impact global consumers.
The Brent crude March contract has demonstrated remarkable strength since the year’s beginning, posting a 9 per cent gain, equivalent to £6.98 per barrel. While oil prices reached their zenith in April last year at £90 per barrel amid Ukraine war concerns and Middle East tensions, subsequent Chinese economic slowdown and property sector challenges moderated these gains.
The market response was reflected in the FTSE 100, where leading oil companies BP and Shell saw their shares climb, closing up 1.43 per cent at 431¼p and 1.45 per cent at £26.63 respectively.
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