With further US restrictions likely to impact Russian crude deliveries to major importers China and India, oil prices continued to rise Monday 13th of January 2025 for a 3rd session, with Brent hitting ($81) a barrel, the greatest level in almost (4) months.

After reaching a high for the day of ($81.49), the highest since the 27th of August Brent oil futures increased ($1.47, or 1.84%, to $81.23) a barrel at (0503 GMT).

Following peaking at ($78.39), the highest since the 8th of October, U.S. West Texas Intermediate crude increased ($1.55, or 2.02%, to $78.12) a barrel.

Day By Day Restriction Increases

Since January 8, Brent and WTI have increased by almost (6%), and both futures saw a sharp increase following the U.S. Treasury’s imposition of additional penalties on Russian oil on 10th of January.

The latest restrictions, which target the money Moscow has used to finance its conflict with Ukraine, targeted (183) boats that have delivered Russian oil as well as suppliers Gazprom Neft (SIBN.MM), opens a new tab.

On the other side China and India, the world’s largest and 3rd-largest oil consumers, respectively, will be forced to source additional petroleum from the (Middle East, Africa, and the Americas) as a result of the new sanctions, which would negatively impact Russian oil shipments and raise prices and transportation costs, according to traders and experts.

Experts at Goldman Sachs wrote in a note, “On 10th of January 2025 Friday’s announcement confirms our belief that the current risks to our ($70-85) Brent range prediction are tilted to the higher.”

In 2024, the boats targeted by the latest restrictions are expected to transport (1.7 million) barrels of oil per day, or (25%) of Russia’s total exports, of which crude oil makes up the great majority.

While the monthly margins for (Brent and WTI) have also retreated to their greatest extent since the 3rd quarter of 2024 due to expectations of tighter supply. In backwardation, current prices are more expensive than those in subsequent months, suggesting a shortage of supply.

The doubling of vessels authorized for transporting Russian oil may pose a significant logistical challenge to petroleum supplies, according to specialists at RBC Capital Markets.

Since the Group of (7) nations’ 2022 price ceiling and earlier Western sanctions moved Russian oil commerce from Europe to Asia, several of the ships included in the most recent restrictions have been used to transport oil to China and India. A few of the vessels have also transported oil from sanctions-targeted Iran.

“India will be particularly affected by the final round of OFAC (U.S. Office of Foreign Assets Control) sanctions that target Russian oil companies and a significant number of tankers,” stated Harry Tchilinguirian, head of research at Onyx Capital Group. According to a JPMorgan researcher, Russia still had some options irrespective of the fresh restrictions, but in order to employ Western insurance in accordance with the Western price limit, it would ultimately be able to buy non-sanctioned tankers or sell oil at or below ($60) per barrel.