Oil prices rise after US sanctions against Rosneft and Lukoil
The US administration introduced new trade restrictions against Russia's largest oil companies Rosneft and Lukoil. As a result, crude oil futures, in particular Brent and WTI, rose by about 3 % in a short time.
One of the reasons for this growth, analysts say, is the possible impact of sanctions on Russian oil supplies, as well as Indian companies' revision of their agreements to purchase Russian raw materials.
Market impact
Brent crude oil contracts reached around $64.5 per barrel, while WTI was around $60.4.
Analysts note that although this is currently more of a market reaction to the news than a fundamental change in the supply-demand balance, the risks of supply disruptions from Russia are putting upward pressure on prices.
Indian state-owned oil refiners began reviewing their purchases of Russian crude oil almost immediately after the sanctions were imposed.
Why it matters
This is what the US decision and the market reaction mean:
There is growing uncertainty as to whether Russia will be able to maintain its oil exports at the current level;
The amount of raw materials available to the world may decrease, which in turn will affect prices;
The issue of participation of large Asian buyers (in particular, India) in the purchase of Russian oil is becoming increasingly painful for Moscow.
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