Today’s markets analysis on behalf of Joseph Dahrieh, Managing Principal at Tickmill
15th January 2025
Crude oil futures continued to advance, driven by expectations that expanded U.S. sanctions could disrupt Russian crude exports to key buyers, China and India. The sanctions target major Russian oil producers and vessels involved in transporting Russian oil, aiming to reduce Moscow’s oil revenue. This reduction in Russian exports could push global crude prices higher at least in the near term, as the market adjusts to the loss of supply from one of the world’s largest oil producers.
In response to the sanctions, China and India are expected to seek alternative crude sources from regions such as the Middle East, Africa, and the Americas, which will likely lead to higher shipping costs. While Russia may attempt to circumvent the sanctions by using non-sanctioned tankers or offering discounts, the new measures are expected to have a significant impact. The tightening of supply could provide support to global crude prices in the short term, as the market factors in the reduced availability of Russian oil and potential increases in shipping costs.