Investing.com – Expanded US sanctions on Russia could impact oil supply flows and distribution chains out of the country, according to a monthly report from the International Energy Agency.
Last week, the US Treasury Department placed restrictions on Russian oil producers Gazprom (MCX:) Neft and Surgutneftegas, as well as 183 vessels that have shipped Russian oil, in a bid to crack down on the money Moscow receives to fund its ongoing military action in Ukraine.
Traders have focused in on the sanctions in recent days, with uncertainty surrounding how much Russian supply will be lost in the global market and whether the country’s major customers — particularly China and India — will need to find alternative sources to counter the shortfall.
Meanwhile, the Paris-based IEA said there is “heightened speculation” the incoming administration of US President-elect Donald Trump will take a tougher stance on oil exports from major producer Iran, “compounding the impact” of current US Treasury sanctions on Tehran.
“While it is too early to fully quantify the potential impact from these new measures, some operators have reportedly already started to pull back from Iranian and Russian oil,” the agency said.
Still, reserve oil stocks can be “quickly” drawn to meet near-term operational requirements if there are “substantial” decreases in supply due to the sanctions or other events such as adverse weather, the IEA noted.
Oil prices have broadly risen in recent days, with the IEA citing the sanctions and cold weather as causes behind a jump in crude above $80 per barrel earlier this month. The market has also found some support from a drop in crude stockpiles in the US, the world’s biggest oil consumer, as reported by the American Petroleum Institute late on Tuesday.
By 05:04 ET (10:05 GMT) on Wednesday, the contract had added 0.3% to $80.18 per barrel.
