The U.S. Treasury announced on Friday sweeping new sanctions against the Russian energy sector, including oil majors Gazprom Neft and Surgutneftegaz, to try to curtail Moscow’s ability to fund its war with Ukraine.
The sanctions also target over 180 tankers and dozens of oil traders, oilfield service providers, insurance companies and energy officials.
Below are reactions from major brokerages and agencies:
Organizations
Topics
Goldman Sachs
“Friday’s announcement strengthens our view that the risks to our $70-85 Brent range forecast are skewed to the upside in the short term.”
“We estimate that the vessels targeted by the new sanctions transported 1.7mb/d of oil in 2024 or 25 per cent of Russia’s exports, with the vast majority being crude oil.”
“Across scenarios, the long-term price impact of lower sanctioned supply is limited because we assume that OPEC+ would stabilize the market by deploying its high spare capacity and by raising production for longer than in our base case.”
Kpler
“The latest sanctions have targeted tankers accounting for about 42 per cent of Russia’s seaborne oil exports, primarily to China.”
“Reduction in fleet supply from Russia will drive freight rates from Russia higher.”
“Limited impact on Russian oil output seen for now, but we anticipate a decline of 150 kbd by late Q3. Crude exports should remain stable, however, as priority is given to crude over dirty products exports.”
Citi
“Knowing almost 30 per cent of the shadow fleet is being targeted with this latest round of sanctions, it would imply a loss of around 0.8-m b/d of crude oil exports.”
JP Morgan
“Despite new sanctions, Russia has some room to maneuver but will ultimately need to acquire non-sanctioned tankers or offer crude at or below $60 to use Western insurance and tankers, per West’s pricing cap.”
“The new measures are likely to give the Trump administration additional leverage in future negotiations with Russia, as it decides whether, when, and under what terms to lift Biden-imposed sanctions.”
RBC Capital Markets
“The new Russian sanctions from the outgoing administration are a net addition to at-risk supply, adding more uncertainty to the 1Q’25 outlook. At face value, there’s a case for Brent to reach the upper $80/bbl range in the near term, all barrels considered, despite margin headwinds. That said, we’ve seen this scenario multiple times in recent years, and supply chain resilience has consistently outperformed.”
ANZ
“…(Russia’s) ability to ship oil will be further compromised by new U.S. sanctions on its oil industry. The main target of the sanctions, Gazprom and Surgutneftegas, handled about 970kb/d of oil by sea in the first 10 months of 2024. There have also been reports that some Chinese ports are being urged to forbid sanctioned oil tankers from docking or unloading at their terminals.”
UBS
“We think it is unlikely that Donald Trump will repeal these sanctions as his first policy decision, opting instead to use them as leverage in potential peace negotiations between Russia and Ukraine.”
“As Chinese ‘teapot’ and Indian refiners may avoid Russian barrels in the short term, we see upside risks to our short-term oil forecasts until new shadow fleet tankers emerge. Considering these risks, we still like to sell crude oil’s downside price risks.”
(Reporting by Rahul Paswan and additional reporting by Sherin Elizabeth Varghese in Bengaluru; Editing by Mrigank Dhaniwala and Emelia Sithole-Matarise)
