Oil prices on Friday rose 4% after the U.S. tightened sanctions against Russian crude exports, exacerbating supply concerns in an already tightly balanced energy market.
International benchmark Brent crude futures with December expiry traded 3.9% higher at $89.34 per barrel at around 6:25 a.m. ET, while front-month November U.S. West Texas Intermediate crude futures rose 4.1% to trade at $86.28 per barrel.
The move back toward $90 a barrel comes after the U.S. on Thursday imposed sanctions on two shipping companies that it said violated the G7’s oil price cap, a mechanism designed to retain a reliable supply of Russian flows in the market while curbing the Kremlin’s war chest.
“This action underscores the Treasury Department’s commitment with its international partners to responsibly reducing Russian government oil profits and constraining the Russian war machine,” the U.S. Department of the Treasury said in a statement.
The G7, Australia and the EU implemented a $60-per-barrel price cap on Russian oil on Dec. 5 last year. It came alongside a move by the EU and U.K. to impose a ban on the seaborne imports of Russian crude oil.
Together, the measures were thought at that time to reflect by far the most significant step to curtail the fossil fuel export revenue that is funding Russia’s war in Ukraine.
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