Oil Prices Surge Amid Supply Disruptions and Sanctions Concerns
Oil prices experienced a notable increase at the close of trading on Friday, November 14, with prices rising over two percent. This surge was largely attributed to supply disruptions following the suspension of exports from the Russian port of Novorossiysk, which was impacted by a Ukrainian drone strike on a key oil facility.
Brent crude futures climbed by $1.38 to settle at $64.39 per barrel, marking a weekly gain of approximately 1.19%. U.S. crude futures also rose, increasing by $1.40 to close at $60.09 per barrel, which represents a weekly increase of 0.57%.
Market participants are closely observing the broader implications of Western sanctions on Russian oil exports and global trading dynamics. On Friday, the UK government issued a special license permitting companies to continue transactions with two subsidiaries of Lukoil in Bulgaria, following the Bulgarian government's takeover of the assets.
Conversely, the United States is intensifying its sanctions, which will prohibit transactions with Lukoil and Rosneft starting November 21, as part of efforts to urge the Kremlin towards peace negotiations.
In light of these developments, J.P. Morgan reported that approximately 1.4 million barrels per day of Russian oil—accounting for about a third of seaborne exports—have been added to tanker inventories. The bank noted that this accumulation is a result of delayed unloading operations due to U.S. sanctions on Rosneft and Lukoil, warning that unloading may become increasingly challenging after the November 21 deadline for receiving oil from these companies, further heightening uncertainty in global energy markets.
