Muscat – Oman crude price surged by 5.5% on Monday to its highest level in four months, reaching $82.22 per barrel, driven by renewed global supply concerns following fresh sanctions targeting Russia’s oil industry. These sanctions, implemented by the US, UK, and Japan, have intensified the global oil market’s focus on potential supply disruptions.

The official price of Oman crude at the Gulf Mercantile Exchange (GME) in Dubai rose by $4.27 per barrel, compared with Friday’s close of $77.95. The March delivery price marks the highest level since September 2024.

The average monthly price of Oman crude for January delivery stood at $72.46 per barrel, down $2.36 from December’s figure, according to GME data.

Meanwhile, global oil benchmarks also advanced on Monday. Brent crude traded at $81.11 per barrel, while West Texas Intermediate (WTI) reached $78.08, both up by over 1% from the previous session’s opening.

The price rally followed the announcement of a new US sanctions package, which the US Treasury Department has described as the harshest yet. The sanctions targeted key Russian oil producers, including Gazprom Neft and Surgutneftegaz, as well as 183 tankers, many of which are part of the ‘shadow fleet’ Russia uses to circumvent Western shipping restrictions, according to an Oilprice.com report.

RBC Capital Markets noted that the sanctions add further uncertainty to global oil supply, especially for the first quarter of 2025, exacerbating existing concerns. “These measures are a net addition to at-risk supply,” the firm said in a note.

The tightening sanctions are expected to disrupt Russian oil exports to major buyers, China and India, with analysts forecasting that these countries will seek alternative supplies from regions such as the Middle East, Africa, and the Americas. This shift could drive up shipping costs and support global crude prices in the short term.

Joseph Dahrieh, Managing Principal at Tickmill, said, “The reduction in Russian exports is likely to push global crude prices higher, at least in the near term, as the market adjusts to the loss of supply from one of the world’s largest producers.”

The latest move by the Biden administration is expected to further isolate Russian oil from the global market, forcing Asian buyers to diversify their sources. “The resulting supply tightness, combined with potential increases in shipping costs, could offer near-term support to oil prices,” Dahrieh added.

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