The strong dollar has kept oil prices, which have been rising over the past few days, somewhat in check
6 January 12:56
Oil prices declined on Monday under pressure from a strong dollar, but remained at their highest level since mid-October as cold weather spurred buying, and expectations of tighter sanctions on oil exports from Iran and Russia also contributed to the price increase. This was reported by Reuters, according to "Komersant Ukrainian".
“Brent crude futures lost 33 cents, or 0.4%, to $76.18 per barrel by 09:50 GMT, the highest price since October 14. U.S. West Texas Intermediate crude fell 35 cents, or 0.5%, to $73.61, which is also the highest level since October 14,” Reuters said.
The agency explains that oil has previously shown gains for five sessions, hoping for a rise in demand after cold weather in the Northern Hemisphere and increased fiscal stimulus from China, which is trying to revive its faltering economy.
Also on Monday, Saudi Aramco, the world’s largest oil exporter, raised oil prices for Asian buyers in February for the first time in three months.
As Bloomberg explains, Saudi Arabia raised its official prices more than expected, given that the world’s largest crude oil exporter may be experiencing supply constraints.
“Saudi Arabia raised the price of its main crude Arabian light crude by 60 cents for Asian buyers. The move follows a spike in oil prices in Oman and Dubai late last year due to tight supplies from Iran and Russia,” Bloomberg notes.
There are also concerns about future oil supplies from Iran and Russia, as sanctions against both producing countries may be tightened.
What kind of sanctions are we talking about?
The Joe Biden administration plans to impose additional sanctions against Russia over its war with Ukraine, targeting its oil revenues. Tankers carrying Russian oil are to be targeted. Three sources with knowledge of the matter told Reuters.
“This is a very significant package. Two Russian oil companies, more than 100 tankers, oil traders, Russian insurance companies, etc.,” said one of the officials, without naming the organizations. However, it remains unclear what Trump’s approach to sanctions against Russia will be.
Goldman Sachs also expects Iran’s production and exports to fall in the coming months as a result of expected policy changes and tougher sanctions by the administration of future US President Donald Trump.
