Oil prices jumped to a three-month high on Friday, as traders spent sweeping new sanctions against Russia as the Biden administration seeks to cut Moscow off from raw revenue amid the ongoing war in Ukraine.
West Texas Intermediate crude (CL=F) rose more than 3.5% to settle at $76.57 a barrel while Brent crude futures (BZ=F), the international benchmark price, briefly hit $80 before settling at $79.76, the highest level since October.
More than 180 ships, two oil companies, traders, insurers, and top Russian executives were named in the sanctions.
“The United States is taking sweeping action against Russia's key source of revenue for financing its brutal and illegal war against Ukraine,” Treasury Secretary Janet Yellen he said in a statement.
Oil prices were already up since late December, with traders uncertain about President-elect Donald Trump's policy towards Iran. Tehran currently produces more than 3 million barrels of crude per day.
“News continues to filter in about (the) Trump administration's tough stance on Iran that could come very quickly,” Dennis Kissler, senior vice president at BOK Financial, wrote in a note to clients on Friday.
“Add in the icy spells across most of the US, along with shrinking storage volumes, and crude has now become the new 'fund favourite',” he added.
JPMorgan analysts said global oil demand was expected to remain strong through January due to colder-than-expected weather in the Northern Hemisphere “boosting heating fuel use” and early travel activity in China on for the country's Lunar New Year holiday.
Despite Friday's sharp rise, many analysts expect oil prices to move lower this year than in 2024.
“Despite ongoing geopolitical conflict, a combination of bearish factors is likely to keep oil prices structurally low in 2025, with a likely price range of $60-$80 per barrel for spot brent crude oil. That would be below the $70-$90 per barrel range will dominate 2024,” Eurasia Group wrote in a note on Thursday.
Ines Ferre is a senior business reporter for Yahoo Finance. Follow her on X in @ines_ferre.
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