Oil prices rose to their highest level in three months on Friday, prompting investor concern recent, far-reaching sanctions against Russia as the Biden administration tries to chop off Moscow’s oil revenues over the continuing war in Ukraine.
West Texas Intermediate crude (CL=F) rose as much as 4% to $77 a barrel ahead of comparable gains, while Brent crude futures (BZ=F), the international benchmark price, gained 2% to $80, a high from October.
The sanctions covered greater than 180 ships, two oil firms, traders, insurers and top Russian executives.
“The United States is taking sweeping action against a key source of revenue for Russia that funds its brutal and illegal war against Ukraine,” said Treasury Secretary Janet Yellen he said in a statement.
Oil prices had been trending upward since late December, with traders uncertain about President-elect Trump’s Iran policy. Tehran currently produces over 3 million barrels of oil per day.
“The news is still coming in approx [the] The Trump administration’s tough stance on Iran could come very soon,” Dennis Kissler, senior vice president of BOK Financial, said on Friday.
“Add to this the frigid temperatures across most of the United States and the dwindling number of storage facilities, and crude oil has now become the new ‘funds’ darling,’” he added.
JPMorgan analysts say global oil demand will remain strong in January due to colder-than-expected weather in the Northern Hemisphere, “increasing fuel use for heating” and early travel activity in China to celebrate the Lunar New Year.
Despite Friday’s surge, many analysts expect oil prices to be lower this year than in 2024.
“Despite ongoing geopolitical conflicts, a combination of bearish factors is likely to keep oil prices structurally low in 2025, with a Brent crude price range of $60-$80 per barrel likely. This would be below the $70-90 per barrel range that will dominate 2024,” Eurasia Group said in a note on Thursday.
Ines Ferre is a senior business reporter at Yahoo Finance. Follow her on X at @ines_ferre.
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