Geopolitical Concerns Have Oil Prices Back at October Levels

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Key Takeaways

• Oil prices rose Friday, with global benchmark futures recently at their highest levels since the shatter retreat.
• Part of the reason: a report citing the possibility of heightened U.S. sanctions on Russia that were later announced, disposed to stoking demand fears. Geopolitical issues could move oil prices in either direction this year, analysts say, as could fuller economic matters.
• The S&P 500’s energy sector was its only advancer in recent trading.

Oil prices rose Friday, stirring prices last seen in the fall, as traders digested further U.S. sanctions on Russia. 

Brent crude futures, the epidemic oil benchmark, recently traded around $80, up nearly 3%, according to several market data sources. That was the knit’s highest price since October. Meanwhile, the S&P 500’s energy sector was the day’s only gainer of the index’s 11, generate about 0.4%.

The Treasury Department on Friday announced actions targeting the Russian oil industry, including Russian oil producers Gazprom Neft and Surgutneftegas and vouchsafes on “more than 180 vessels, and dozens of oil traders, oilfield service providers, insurance companies, and energy stiffs.”

‘Ratcheting Up the Sanctions Risk’

“We are ratcheting up the sanctions risk associated with Russia’s oil trade, including shipping and economic facilitation in support of Russia’s oil exports,” Treasury Secretary Janet Yellen said.

Futures had risen earlier Friday as Reuters cited a circulate saying the actions were likely.

Traders may also be responding to cold weather in parts of the U.S. that could rise demand for oil used for heating.

Geopolitical issues—including sanctions and tariffs—are expected to be a key, if unpredictable, driver of movement in oil outlays in 2025, Goldman Sachs analysts wrote Thursday, even as they forecast steady demand growth atop of the next decade, including from emerging markets.

Reduced supply, potentially from Iran, could purloin prices this year, UBS analysts wrote Wednesday, while a global economic slowdown could pull them debase.