By Shariq Khan
New York (Reuters) -Oil prices rose nearly 3% to their highest in three months on Friday as traders braced for supply disruptions from the broadest U.S. sanctions package on Russian oil and gas revenues.
President Joe Biden’s administration has imposed new sanctions on Russian oil producers, tankers, intermediaries, traders and ports, aiming to hit every stage of Moscow’s oil production and distribution chains.
Brent crude futures settled at $79.76 a barrel, up $2.84, or 3.7%, after breaching $80 a barrel for the first time since Oct. 7.
U.S. West Texas Intermediate crude futures rose $2.65, or 3.6%, to settle at $76.57 a barrel, also a three-month high.
At their session highs, both contracts rose more than 4% after traders in Europe and Asia circulated an unverified document detailing the sanctions.
Sources in the Russian oil trade and Indian refining told Reuters that the sanctions will seriously disrupt Russian oil exports to key buyers India and China.
“India and China are currently working to find alternatives,” Anas Alhajji, managing partner at Energy Outlook Advisors, said in a video on social network X.
The sanctions will limit Russian oil export volumes and make them more expensive, according to UBS analyst Giovanni Staunovo.
Their timing, just days before the inauguration of newly elected President Donald Trump, makes it likely that Trump will keep the sanctions in place and use them as a negotiating tool for a peace treaty in Ukraine, Staunovo added.
Oil prices were also boosted as extreme cold in the US and Europe boosted demand for heating oil, said Alex Hodes, an analyst at brokerage firm StoneX.
“We have several customers in the Port of New York who are seeing an increase in demand for heating oil,” Hodes said. “We have also seen a bid for other heating fuels,” he added.
U.S. ultra-low sulfur diesel futures, previously called the heating oil contract, rose 5.1% to settle at $105.07 a barrel, the highest since July.
“We expect a significant year-on-year increase in global oil demand of 1.6 million barrels per day in the first quarter of 2025, mainly driven by demand for heating oil, kerosene and LPG,” JPMorgan analysts said in a note. on Friday.
(Reporting by Shariq KhanAdditional reporting by Anna Hirtenstein, Enes Tunagur and Sudarshan VaradhanEditing by David Goodman and Frances Kerry, Kirsten Donovan, Deepa Babington, Louise Heavens and David Gregorio)
