U.S. and EU Announce Sanctions on Russia, Causing Sharp Rise in International Oil Prices

Following the U.S. announcement of a new round of sanctions against Russia on the 22nd and EU member states reaching an agreement on the 19th round of sanctions against Russia, international oil prices rose over 5% on the 23rd, hitting a two-week high.

As of the close on the 23rd, the price of light crude oil for December delivery on the New York Mercantile Exchange increased by $3.29 to settle at $61.79 per barrel, a rise of 5.62%. The price of Brent crude for December delivery in London rose by $3.40 to settle at $65.99 per barrel, a gain of 5.43%.

U.S. Treasury Secretary Besant announced on the 22nd that the U.S. is imposing sanctions on Russia's two largest oil companies—state-owned Rosneft and privately-owned Lukoil. According to Bloomberg estimates, these two companies account for nearly 50% of Russia's total crude oil exports.

Earlier on the 22nd, EU member states reached an agreement on the 19th round of sanctions against Russia. European Commission President von der Leyen issued a statement on the 19th, announcing the submission of the 19th round of sanctions against Russia to member states. According to the statement, the EU will ban Russian liquefied natural gas from entering the European market and set a price cap for Russian crude oil at $47.6 per barrel. Russian oil trading companies and Gazprom Neft will face comprehensive transaction bans. Under EU procedures, the new round of sanctions must be unanimously approved by all 27 member states before taking effect.

Analysts from Capital Economics believe that the sanctions against Russia could severely impact the global oil market, leading to a shortage in global oil supply next year.