Oil leaps over $3 after US sanctions Russian tankers; Brent up $89/bbl

Oil prices leapt more than $3 on Friday, October 13, with the benchmark Brent on track for its highest weekly gain since April, after the US tightened its sanctions program against Russian crude exports, raising supply concerns in an already tight market.

Brent futures rose $3.21, or 3.7 per cent, to $89.21 per barrel and US West Texas Intermediate (WTI) crude gained $3.11, or 3.8 per cent, to $86.02 a barrel, after earlier breaking the $4 barrier. Despite fluctuations through the week in both crude benchmarks, Brent was set for a weekly gain of 5.4 per cent. its highest such increase since April. WTI was set to climb about 3.8 per cent for the week, after both surged on Monday, according to news agency Reuters.

Back home, on the Multi Commodity Exchange (MCX), crude oil futures due for a October 19 expiry, was last trading higher by 4.41 per cent at 7,200 per bbl, having swung between 6,962 and 7,237 per bbl during the session so far, against a previous close of 6,896 per barrel.

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What’s driving crude oil prices?

-On Thursday, the US government imposed the first sanctions on owners of tankers carrying Russian oil priced above the G7’s price cap of $60 a barrel, to close loopholes in the mechanism designed to punish Russia for its invasion of Ukraine.

-Russia is the world’s second-largest oil producer and a major exporter and the tighter US scrutiny of its shipments could curtail supply.

-The uptick in oil prices was driven by the potential for disruptions to Middle Eastern exports after the weekend attack by militant Islamist group Hamas on Israel threatened a wider conflict.

-The Organization of the Petroleum Exporting Countries (OPEC) kept its forecast for growth in global oil demand, citing signs of a resilient world economy so far this year and expected further demand gains in China, the world’s biggest oil importer.



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Updated: 13 Oct 2023, 10:05 PM IST

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