New sanctions imposed by the Biden administration on Russia have triggered concerns of a potential supply shock in the oil market. Rystad Energy estimates the sanctions, targeting vessels carrying Russian crude and related extraction and trading firms, could curtail exports by as much as 1 million barrels per day. However, the short timeframe for implementation may limit the actual impact on oil flows.
Rystad Energy forecasts Brent crude prices to remain range-bound around $80 per barrel, with a limited likelihood of breaching $90. The energy consultancy suggests the current shock could last several weeks. It's noteworthy that previous global sanctions against Russia in 2022 did not significantly reduce Russian production or exports, with prices quickly retreating below $100 per barrel.
Goldman Sachs, however, indicates the sanctions could push Brent to test the $85 per barrel level. Current prices are trading above $81 per barrel.
Uncertainty Looms Over Future Supply
Several uncertainties remain, including potential policy shifts under a new Trump administration and OPEC+'s production strategy beyond the first quarter of this year, during which the expanded cartel maintains output cuts.
Technical Analysis
Brent crude opened with a significant gap up today, breaching $81 per barrel and the 50% Fibonacci retracement level of the recent decline. The next key resistance level is around $82 per barrel, coinciding with local highs from August 2024. A crucial resistance also lies at $83 per barrel, representing the 61.8% Fibonacci retracement.
Source: xStation5
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