Oil prices extended their gains for a third consecutive session on Monday, with Brent crude rising above $80 a barrel, the highest in more than four months.
Brent crude futures rose by $1.20, or 1.5%, to $80.96 a barrel, while U.S. West Texas Intermediate (WTI) crude was up $1.30, or 1.7%, at $77.87 a barrel.
The surge follows the U.S. Treasury’s imposition of broader sanctions on Russian oil, which included sanctions on major producers such as Gazprom Neft and Surgutneftegaz, as well as 183 vessels involved in shipping Russian oil. These sanctions are expected to reduce oil exports to key buyers like India and China, tightening supply.
Brent and WTI have climbed about 6% since January 8, with expectations of tighter supply pushing their monthly spreads to the widest backwardation since the third quarter of 2024.
The OPEC+ group, including Russia-led producers, is holding back 5.86 million barrels per day, representing around 5.7% of global demand. Many of the tankers affected by the sanctions have been transporting oil to India and China, shifting trade patterns after previous sanctions and a price cap on Russian oil imposed by the Group of Seven countries.
Some vessels have also been used to move oil from Iran, which is under sanctions as well.
