Global oil price soars above $81 as US imposes new sanctions on Russia’s oil industry 

Brent rose above $81 per barrel on Monday as the global oil market responded to the latest aggressive sanctions on Russia’s oil industry by the United States.

Nairametrics reported that after oil marketers in India and China got a wave of the sanctions on Friday, the global oil benchmark crossed $80 a barrel as they held emergency meetings to assess the situation.

This is the highest price in more than four months, as U.S. sanctions on Russia and Iran project global oil prices to sour.

The latest sanctions target large exporters of Russian oil, including those of Asia origin, insurance companies, and more than 150 tankers.

According to Bloomberg, the latest sanctions are a desperate and aggressive attempt by President Joe Biden to give Ukraine the upper hand in possible peace negotiations before he leaves office next week.

Independent refiners in China reportedly held emergency meetings to assess the new sanctions to see if they could still take delivery of crude en route when the penalties were announced.

Traders in India reportedly had similar meetings and were bracing for major disruption in oil importation, which could last up to six months.

About the Sanctions The United States and its allies in Europe had imposed a series of sanctions on Russia after a war broke out between Moscow and Kyiv. The sanctions are part of measures by the West to support Ukraine and pressure Russia into a peace deal with its neighbour.

However, India emerged as a major importer of Russian oil after the war, disregarding Western sanctions. China also continued its trade with Moscow, as PresidentXi Jinping argued that the U.S. does not have the right to unilaterally impose sanctions on any country.Major Russian energy companies — Gazprom Neft and Surgutneftegas – were the major targets of the various sanctions. The two companies export about a million barrels of crude oil per day.The net of sanctions has been extended to capture tanker owners, insurance companies, and vessels, among other stakeholders having business transactions with Russia.Over 20 subsidiaries of Gazprom Neft and Surgutneftegas and more than 180 vessels associated with Russia’s so-called shadow fleet were included in Friday’s sanctions.

The US is also sanctioning more than two dozen of the companies’ subsidiaries as well as more than 180 vessels, many of which are associated with Russia’s so-called shadow fleet. The latest action doubles the number of targeted oil tankers.

Bloomberg noted that the global oil market anticipated a surplus of almost 1 million barrels a day this year, but a material loss of Russian supply would eat into that.

What you should know President-elect Donald Trump is predicted to favour President Putin in his pledge to end the war between Russia and Ukraine. If this happen, he would likely lift or relax the ban on Russia’s oil industry.While relaxing sanctions on Moscow may stabilise the oil market, Trump’s threat to impose more sanctions on Iran may rub the market off the expected stability.High global oil prices mean increased revenue for Nigeria but it also means a possible hike in retail prices.

Oluwatobi Odeyinka Oluwatobi Odeyinka is an Editorial Analyst covering energy, manufacturing and agriculture. He has years of experience as a freelance Journalist telling stories around public accountability, social justice and development.