FX.co ★ Oil Set for Strongest Week in Nearly Five Months

Crude oil futures for West Texas Intermediate (WTI) rose above $61 per barrel on Friday, maintaining levels close to a two-week peak and poised to achieve their most significant weekly increase since early June. This surge is fueled by fresh U.S. sanctions on significant Russian oil producers, intensifying concerns over potential supply shortages. The United States government has placed state-run oil majors Rosneft and Lukoil on the blacklist, aiming to increase pressure on Moscow in response to the conflict in Ukraine. These two companies are pivotal, representing nearly half of Russia’s oil exports, and play a crucial role in financing the Russian government’s budget.

In the wake of these sanctions, reports have surfaced that Chinese state-owned oil companies have suspended purchases of Russian oil delivered by sea. Concurrently, Indian oil refineries are preparing to significantly reduce imports to adhere to these new restrictions. The European Union has also stepped up, imposing additional sanctions that focus on Russia's energy infrastructure. Amidst this backdrop, Ukrainian forces persist in their strategic targeting of refineries, pipelines, and export terminals. Kyiv announced it successfully targeted a Rosneft refinery on Thursday.