Crude oil closes in the plus, as a tightening of supply is expected due to the price limit on Russian oil

Crude oil futures closed higher on Monday (Sept. 12), responding to estimates that sanctions against Russian oil would lead to a tightening of global supply.

  • WTI crude futures were up 99 cents, or 1.1%, at $87.78 a barrel.
  • BRENT crude futures were up $1.16, or 1.3%, at $94 a barrel.

Investors are anticipating a tightening of global oil supplies as the European Union (EU) has imposed sanctions on Russian oil. This measure will come into effect on December 5 this year.

The finance ministers of the G7 countries have agreed to take action to set a cap on the price of Russian oil. This is intended to weaken Russia’s financial position so that it does not use the proceeds to support the war with Ukraine.

The measure to cap Russian crude oil prices will come into effect on December 5, 2022, and will also apply to petroleum products from February 5, 2023.

The U.S. Treasury secretary warned that sanctions on Russian oil and the application of Russian oil price caps will drive up oil prices this winter.

Crude oil contracts were also boosted as the Iran nuclear deal was called into question after Western countries expressed doubts about Iran’s sincerity in reviving the agreement.

If talks on the Iran nuclear deal fail, Iran will not be able to return to global oil exports.

In addition, the U.S. Department of Energy reported that strategic crude oil stocks (SPR) fell by 8.4 million barrels last week to 434.1 million barrels, the lowest level since October 1984.

The Spot Market is Open

Tuesday, September 13, 2022

Energy
Updated at
USD
Price

Change

%Change
Crude Oil
10.00

87.63

-0.15

-0.17%

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