(RTTNews) – Crude oil rose on Thursday compared to the previous two sessions as the US adopted a “sanctions path” against Russia.
WTI crude oil for December delivery was last seen trading at $61.72 per barrel, up $3.22 (or 5.50%).
To curb Russia’s efforts to raise revenue to finance its war against Ukraine, the US Treasury Department announced new sanctions targeting Russian oil companies Rosneft and Lukoil, as well as some of their subsidiaries.
Rosneft and Lukoil are among the largest corporations listed on the Moscow Stock Exchange, exporting about 3.1 million barrels of crude oil per day and worth $50 billion each.
Following the US’s sudden move, the 27-member EU adopted the 19th sanctions package against Russia targeting its shadow fleet of oil tankers and banning imports of liquefied natural gas.
The sanctions include an additional 117 ships from the “shadow fleet”, bringing the total number of blacklisted tankers to about 560.
Russian oil companies, Rosneft and Gazpromneft are now on a complete transaction ban.
In the first phase of the liquefied natural gas ban, short-term contracts expire after six months, and long-term contracts cease from January 1, 2027.
The package also limits the movement of Russian diplomats within the EU.
Earlier this week, US President Donald Trump had announced that Indian Prime Minister Narendra Modi had assured that India would restrict the purchase of Russian crude oil. However, India has not yet officially confirmed Trump’s statements.
These collective steps are aimed at increasing pressure on Russia, as well as increasing demand for crude oil from other sources.
As a result of these continued concerted actions by the US and the West, oil prices surged as concerns about supply disruptions increased.
Meanwhile, the Labor Department is scheduled to release its readings on consumer prices on Friday. Currency markets are preparing for an interest rate cut at the upcoming US Federal Reserve meeting on October 28-29 due to recent reports indicating weakness in the US labor market.
US-China trade tensions, which were sparked by China’s moves to curb rare earth mineral exports, have been waxing and waning.
The leaders of the two countries are scheduled to meet in South Korea next week. However, US Treasury Secretary Scott Besant warned that if China did not change its stance, every significant software export from the US to China would become inaccessible to China.
The US and China are the world’s largest economies and the largest consumers of critical commodities, including crude oil. The collision between them is pushing the oil upward.
Crude oil also received support after the US Energy Department announced plans to buy 1 million barrels of crude oil for delivery into the Strategic Petroleum Reserve.
The DoE intends to take advantage of the current low oil prices to help replenish its reserves. At SPR’s 700-million-barrel capacity and its current holdings of 408 million barrels, the desired volume, while symbolic, represents an attraction to the current low prices.
In the Middle East, as the Trump-backed Gaza peace plan enters its next phase, disarmament as agreed by Hamas remains in doubt and who will rule Gaza, although so far the situation remains peaceful.
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