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Oil Up with New G7 Sanctions on Russia

Commodities Jun 27, 2022 11:51PM ET
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© Reuters.

By David Ho

Investing.com – Oil was up on Tuesday morning in Asia amid tight supplies. But leaders of the Group of Seven (G7) nations vowed to add pressure on Russia while lowering energy prices.

Brent oil futures rose 1.21% to $112.32 by 11:13 PM ET (0313 GMT) and crude oil WTI futures rose 1.20% to $110.89. Oil prices stayed above $110 a barrel as crude and oil product supplies remained tight after the West posed sanctions on Russian oil.

The (G7) has vowed to stand with Ukraine "for as long as it takes." A proposal to cap the price of Russian oil is one of the new sanctions on Moscow's finances.

"I think if they were to implement a price cap on sale and purchase of Russian oil, it's difficult for me to imagine how this is going to be implemented, especially when China and India have become Russia's biggest customers," said Houston-based oil consultant Andrew Lipow.

Commonwealth Bank of Australia analyst Vivek Dhar had doubts about the move. He noted that there was "nothing stopping Russia from banning oil and refined product exports to G7 economies in response to a price cap, exacerbating shortage conditions in global oil and refined product markets."

A French presidency official suggested the international community should explore all options to alleviate tight energy supplies, including talks with producing nations like Iran and Venezuela. Both OPEC members' oil exports have been curbed by U.S. sanctions.

Furthermore, interest rate hikes in key economies strengthened the dollar and fanned fears of a global recession.

Recession fears and interest rate hike expectations have caused volatility and risk aversion in the futures markets. Some energy investors have pared back, while spot crude prices have remained strong on high demand and a supply crunch.

For now, pressing supply worries outweigh growth concerns.

Members of the Organization of the Petroleum Exporting Countries and their allies including Russia, known as OPEC+, are likely to stick to a plan for accelerated oil output increases in August when they meet on Thursday, sources said.

The producer group also cut its projected 2022 oil market surplus to 1 million barrels per day (bpd), down from 1.4 million bpd previously, a report seen by Reuters showed.

Libya might also halt exports in the Gulf of Sirte area within 72 hours amid unrest that has restricted production.

Adding to supply woes, Ecuador might suspend oil production completely within 48 hours amid anti-government protests that have seen at least six people die.

Traders are also waiting for the U.S. government oil inventory and other data to be published after it was not released last week due to server issues.

U.S. crude oil, distillate, and gasoline inventories likely fell last week, a preliminary Reuters poll showed on Monday.

 
Oil Up with New G7 Sanctions on Russia
 

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Comments (9)
Ken Roth
Ken Roth Jun 28, 2022 3:29PM ET
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We dont your russian bot opinion lucky man
Ken Roth
Ken Roth Jun 28, 2022 3:29PM ET
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Want
Lucky Man
Lucky Man Jun 28, 2022 2:50AM ET
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Worst president ever....Biden
Brad Albright
Brad Albright Jun 28, 2022 2:50AM ET
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You do support him in his efforts to defend Ukraine though, right?
Lucky Man
Lucky Man Jun 28, 2022 2:50AM ET
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Brad Albright he is not barely defending Ukraine, they just only play games
Lucky Man
Lucky Man Jun 28, 2022 2:50AM ET
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Brad Albright do you remember what he said before that he will defend Ukraine, but suddenly change and only giving support on weapons but also US energy is gaining billions on OIL and NATGAS profit, if he is serious to bring down the energy price, he must not be an anti fossil
Lucky Man
Lucky Man Jun 28, 2022 2:50AM ET
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Biden will no longer win the election..even he endorse his party mate will not win...he is now returning favor to his election donors...he is serving the businessmen rather than american people
Lucky Man
Lucky Man Jun 28, 2022 2:48AM ET
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Russia waging war on Ukraine while US and EUROPE is waging economic war on Russia and the WHOLE WORLD....their actions make hurt more on poor countries...why they just send more missiles and tanks to ukraine then using economic war.. This becomes more painful for middle and below poor countries.... *******playing with this politicians
Ramesh Shah
Ramesh Shah Jun 28, 2022 2:46AM ET
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Politicians need Oil n Gas industry Input before talking more non sense about Sanctions.
Eli Refaeli
Eli Refaeli Jun 28, 2022 1:08AM ET
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It seems to me that all the quotes from Reuters at this time, encourage a high oil price. A little suspicious
Junk Man
Junk_Man Jun 28, 2022 12:27AM ET
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This is the Biden price hike
Jason Moreira
Rolln Jun 28, 2022 12:20AM ET
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They need to sanction china & india for buying russisan oil
Nick Johnson
Nick Johnson Jun 28, 2022 12:06AM ET
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Biden is forcing the US people to pay the bill for his *****measuring contest with Putin.
Brad Albright
Brad Albright Jun 28, 2022 12:06AM ET
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Yesterday, Russia launched 2 missiles into a crowded shopping mall, ******18 innocent people. The US people are happy to pay the bill to stop this archaic barbarism. If your country is ever attacked, you will hope the people of the US are on your side.
 
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