How Do Sanctions Affect Oil Prices?

Brent Oil Prices in the Markets

In international markets, the Brent crude oil price is trading at $63.65 per barrel. The price rose to $64.22 yesterday but finished the day at $63.33. As of today at 09:06, it reached $63.65 with a 0.5% increase. Meanwhile, West Texas Intermediate crude oil is being sold at $59.74.

The Impact of Sanctions

The limited increase in oil prices is largely determined by the sanctions imposed by Europe and the US on Russia. In particular, the sanctions led by the US are creating supply shortages in the markets and are causing the upward momentum in prices to remain limited. US President Donald Trump included Russia's second-largest oil producer Lukoil and its subsidiaries in the sanctions list on October 23, citing a "serious lack of commitment" in the peace process regarding the war in Ukraine.

Gunvor Group Withdraws Offer

Gunvor Group, based in Switzerland, which submitted a bid to acquire Lukoil's international assets, announced that it has withdrawn its offer. In its statement, Gunvor emphasized that it has maintained a distance from the Russian market for the past 10 years and halted trading in compliance with the sanctions. The company announced that it has put Russian assets up for sale and explicitly condemned the war in Ukraine.

Market Analyses and Future Expectations

Experts predict that the impact of the sanctions on the world's largest oil importers, China and India, will create a limited supply. However, this situation could temporarily support global markets. At the same time, it is noted that the upward pressure on oil prices will be fragile, and expectations of excess supply next year will continue to pressure prices.

Low Demand in the US

Concerns about demand in the US continue to exert downward pressure on prices. According to the US Energy Information Administration (EIA), commercial crude oil inventories in the country increased by approximately 5.2 million barrels to reach 421.2 million barrels last week. Market expectations were for inventories to decrease by 2.4 million barrels. This increase has created a perception of low demand.

Technical Analysis

The important technical levels to monitor for the future trend of oil prices are: $66.23 as a resistance point for Brent oil and $60.39 as a support level.