Global oil prices climbed for a second consecutive day on Friday, driven by supply concerns following U.S. sanctions on Russia’s two largest oil companies, Rosneft and Lukoil, over the ongoing war in Ukraine. The move has fueled fears of disruptions in global crude flows, sending prices higher and marking oil’s strongest weekly gain since mid-June.
As of 11:25 GMT, Brent crude futures rose by 46 cents, or 0.7%, to $66.45 per barrel, while U.S. West Texas Intermediate (WTI) also gained 46 cents to trade at $62.25. Both benchmarks had jumped more than 5% on Thursday after the sanctions announcement, putting them on track for an estimated 7% weekly rise.
According to Giovanni Staunovo, a UBS commodity analyst, the market remains in a “wait-and-see mode” as traders assess the real impact of the sanctions on global oil flows. Analysts note that the oil market structure has shifted back to backwardation, signaling concerns about undersupply rather than oversupply.
The sanctions, announced by U.S. President Donald Trump, target Rosneft and Lukoil — companies that together produce over 5% of the world’s oil output. The decision prompted Chinese state oil firms to temporarily suspend Russian crude purchases, while Indian refiners, Russia’s biggest seaborne buyers, are preparing to cut imports sharply.
Janiv Shah, Vice President of Rystad Energy, warned that “flows to India are at particular risk,” though Chinese refiners may face less impact due to diversified supplies and healthy stock levels.
Meanwhile, Kuwait’s oil minister said that OPEC stands ready to boost production to offset any supply shortfall triggered by the sanctions.
Russia, the world’s ., dismissed the measures as “unfriendly acts.” President Vladimir Putin claimed the sanctions would not significantly harm Russia’s economy but acknowledged their strain on global markets.
The European Union and Britain have also expanded their sanctions, targeting Russian energy assets and banning liquefied natural gas (LNG) imports, while adding two Chinese refiners and Chinaoil Hong Kong to the restricted list.
Traders are now watching a planned meeting between President Trump and Chinese President Xi Jinping next week, which could shape the outlook for global trade and energy markets as both nations seek to ease long-standing trade tensions.