Oil prices are approaching $90 a barrel following intensified US sanctions on Russian oil exports.
Today, oil saw an increase of 3.6%, marking its most significant jump since Monday when the Middle East conflict influenced the markets.
Brent crude has surged past $89 amidst a fluctuating week for the resource.
Meanwhile, the US-sourced West Texas Intermediate climbed 3.9% today, reaching over $86 per barrel.
On Friday, gas prices surged to their loftiest level since February due to escalating Middle East tensions and the anticipation of colder weather.
A series of events heightened concerns about gas supply as winter approaches in the UK. This is further exacerbated by Israel’s decision to shut down its Tamar gas field in the Mediterranean, coinciding with predicted temperature drops in western Europe over the weekend.
European wholesale gas prices climbed to €55 per megawatt hour (MwH) on Friday morning, a jump from €53 on Thursday and a significant increase from €35 at September’s beginning.
On Thursday, the U.S. Treasury’s Office of Foreign Assets Control announced sanctions on two shipping firms involved in transporting Russian crude priced above the $60 per barrel limit set by an international coalition.
Last December, in response to Russia’s actions in Ukraine which pushed global energy prices, the G7, European Union, and Australia placed a pricing limit on Russian oil and its derivatives. This was to maintain a steady supply while curtailing the financial gains of the Russian Federation.
Deputy Treasury Secretary Wally Adeyemo emphasized, “Our actions today highlight our ongoing efforts to curb Russia’s war funding from Ukraine and uphold the established price ceiling.”
Additionally, the escalating conflict between Israel and Hamas has contributed to oil price fluctuations, though experts believe this influence is short-lived given Israel’s minor role in oil production.
Alex Rudolph, an IG market analyst, commented, “Oil and gas prices ascended as Qatar contemplated an export ban on gas while Israel’s Gaza blockade persists and as the US toughens sanctions on Russian oil exports.”
He added, “Friday saw a surge in oil prices by over 3%, and Europe’s natural gas futures grew by roughly 40% this week. The anticipated drop in temperatures could further strain demand and supply.”
