Oil steadies as the US is unlikely to impose sanctions on Russian oil flows

February 24, 2022 01:52 PM AEDT | By Arpit Verma

Sanctions on Russia

Both US and Britain imposed sanctions on Russia. The US targeted Russian banks while Europe blacklisted the country's politicians. At the same time, Germany ceased the US$11 billion Nord Stream 2 project.

Furthermore, on Wednesday the US also imposed sanctions on the company in charge of building the Nord Stream 2 project. Europe's most diverse energy project has not begun operations pending clarification by European Union and Germany.

Russia Ukraine tension

The rising tension between Russia and Ukraine has triggered crude oil supply tension as Russia is one of the largest producers of crude oil in the world. The western countries’ sanctions on Russia could disrupt the oil supply into the market.

However, the US made it clear that sanctions agreed and those which may be imposed will not target oil and gas flows.

Good Read: How a Russian invasion of Ukraine might impact crude oil prices

Image source: © Gumpapa | Megapixl.com

The current supply disruptions came at the time when the Organization of the Petroleum Exporting Countries (OPEC) along with its allies are also struggling to produce their agreed limit.

The talks on the revival of the 2015 Iran Nuclear deal are on the verge of finalisation and expected to pump as much as 1Mbpd of oil into the market to cool boiling prices of crude oil.

Meanwhile, Australia plans to tap its oil stockpiles held in the US in coordination with other International Energy Agency members if the war between both nations hits global supplies.

Also Read: WTI Crude surpasses US$90/bbl as frigid weather cascades across the US

Bottom Line

Crude oil prices steadied on Wednesday after hovering near US$100 per barrel on Tuesday as the US made it clear that sanctions agreed and those which may be imposed will not target oil and gas flows.

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