Oil Jumps 2.5% After U.S. Sanctions on Russian Companies

SadaNews Economy - Oil prices surged about 2.5% this Thursday, continuing the gains initiated in the previous session, amid renewed concerns about supplies after the United States imposed sanctions on two major Russian oil companies, "Rosneft" and "Lukoil," in the context of the conflict in Ukraine.

Brent crude futures rose by $1.56 or 2.49% to reach $64.15 a barrel by 03:03 GMT, while U.S. West Texas Intermediate crude futures increased by $1.53 or 2.62% to hit $60.03 a barrel.

Washington stated it is prepared to take further measures, while simultaneously urging Moscow to agree immediately to a ceasefire in the Russian war in Ukraine.

U.S. President Donald Trump had resisted pressure for months from congressional members to impose sanctions on the Russian energy sector, hoping that Moscow would agree to end the fighting, but he said he felt it was time to act after the absence of any signals of a near end to the conflict.

Last week, Britain imposed sanctions on "Rosneft" and "Lukoil," while the European Union approved its nineteenth package of sanctions against Russia, which included a ban on imports of Russian liquefied natural gas.

Priyanka Sachdeva, a market analyst at "Phillip Nova," stated that "the new sanctions imposed by President Trump on the largest oil companies in Russia aim to choke the revenues the Kremlin is using to finance the war, a step that could lead to a reduction in the actual flow of Russian oil barrels."

Immediately after the announcement of the U.S. sanctions, Brent and West Texas Intermediate futures rose by more than two dollars per barrel, also supported by a surprise drop in U.S. inventories.

However, skepticism in the markets about the ability of the sanctions to cause a significant shift in supply limited oil gains at the end of the session.