Oil prices advanced on Wednesday, driven by additional sanctions decided by the European Union against “ghost fleet” Russian, which could have an impact on the Kremlin's oil exports. The price of a barrel of Brent from the North Sea, for delivery in February, gained 1.84% to $73.52. The price of its American equivalent, a barrel of West Texas Intermediate (WTI), for delivery in January, rose 2.43%, to $70.29. “The market took note of the European Union's decision to add additional sanctions that could reduce oil deliveries from Russia”commented for AFP John Kilduff, analyst at Again Capital.
EU member countries agreed on Wednesday to sanction around 50 additional vessels from the “ghost fleet”which allows Russia to export its oil by circumventing Western restrictions. Made up of around 600 ships, the “ghost fleet” Russian transports nearly 1.7 million barrels of oil per day, London estimated in July. This measure was officially announced as part of the 15th package of EU sanctions targeting Russian interests since the invasion of Ukraine in 2022 and will be ratified on Monday by the Twenty-Seven.
Uncertainty in Syria
Ukraine's international backers have sought to limit the funds fueling the Kremlin's war machine by imposing price caps and restrictions on Russia's oil exports. “Turning a blind eye to oil flows from Russia and Iran” a “made it possible to keep (oil) prices relatively low and prevent them from increasing”argued Mr. Kilduff. “If (the EU) decides to crack down on all this, (…) it will support prices and push them up”he added.
At the same time, the bullish factor is also linked to “tougher sanctions against Russian oil trade that the Biden administration would consider” before his departure, report Helge André Martinsen and Tobias Ingebrigtsen, analysts at DNB, citing information from Bloomberg. Black gold prices have also been fueled by uncertainty in Syria since the fall of Bashar al-Assad. Syria is not a strategic country in oil production, but the unknowns about “the future of the country and the entire region raises concerns about the supply of crude”noted Susannah Streeter, analyst at Hargreaves Lansdown.
