Oil prices jumped to a three-month high on Friday, with traders digesting latest, sweeping sanctions against Russia because the Biden Administration tries to chop off Moscow from crude revenue amid the continued war in Ukraine.
West Texas Intermediate crude (CL=F) rose as much as 4% to $77 per barrel before paring gains, while Brent crude futures (BZ=F), the international benchmark price, gained 2% to hit $80, the best level since October.
Greater than 180 vessels, two oil corporations, traders, insurers, and top Russian executives were named within the sanctions.
“America is taking sweeping motion against Russia’s key income for funding its brutal and illegal war against Ukraine,” Secretary of the Treasury Janet Yellen said in an announcement.
Oil prices were already on an upward trend since late December, with traders uncertain over President-elect Trump’s policy toward Iran. Tehran currently produces greater than 3 million barrels of a crude per day.
“News continues to filter in about [the] Trump administration’s hard stance on Iran that will come in a short time,” Dennis Kissler, senior vp at BOK Financial, said in a note to clients on Friday.
“Add within the freezing temps across many of the US, together with shrinking storage numbers, and crude has now grow to be a latest ‘fund favorite,'” he added.
JPMorgan analysts said global oil demand is predicted to stay strong through January as a consequence of colder-than-expected weather within the Norther hemisphere “boosting heating fuel consumption” and early travel activities in China for the country’s Lunar Latest Yr holiday.
Despite Friday’s sharp rise, many analysts expect that oil prices will move lower this 12 months than in 2024.
“Despite ongoing geopolitical conflicts, a mix of bearish aspects will likely keep oil prices structurally low in 2025, with a possible price range of $60-$80 per barrel for Brent spot crude oil. That may be below the $70-$90 per barrel range that dominated 2024,” said a Eurasia Group note on Thursday.
Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X at @ines_ferre.
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