Oil prices continue to rise this week following the U.S. announcement of strict sanctions on Russian oil. As of 12:00 PM ET, WTI crude for February delivery was up by 3.0%, reaching $78.77 per barrel. Meanwhile, Brent crude for March delivery saw a 1.8% increase, trading at $81.18 per barrel.
The price surge follows a report by Reuters revealing a U.S. Treasury document that listed around 180 vessels, several top Russian oil executives, dozens of traders, and two major oil companies under U.S. sanctions. The Biden administration has specifically targeted Surgutneftgas and Gazprom Neft, two companies responsible for 25% of Russian oil exports. These companies were responsible for shipping an average of 970,000 barrels per day in 2024.
In response, India has announced its intention to comply with the sanctions and reject sanctioned tankers. Previously, it was reported that the sanctions could significantly disrupt Russian oil exports to India and China, the largest buyers of Russian crude. This could also provide the U.S. with more leverage in negotiations to end the war in Ukraine. Last year, India briefly became the largest buyer of Russian oil, overtaking China. However, India’s imports of Russian oil dropped 55% year-on-year in November, reaching their lowest point since June 2022. This decline may be due to India’s efforts to diversify its oil supplies and reduce dependence on one country.
Indian Prime Minister Narendra Modi recently highlighted Guyana as an important part of India’s energy future. During a visit to Guyana, Modi emphasized the country’s role in ensuring India’s energy security and encouraged Indian businesses to invest in the nation.
While India has been increasing its Russian oil imports, it is important to note that the country still relies heavily on the Middle East for its oil supply. The ongoing conflict in the Middle East has further highlighted the vulnerability of India’s energy security.
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