Oil prices fall as Russian export hub deliveries resume and Western sanctions assess impact
Oil prices fell on Tuesday after supply concerns eased following the resumption of shipping operations at the Russian port of Novorossiysk, which had been temporarily halted by a missile and drone attack.
Traders continue to assess the potential impact of Western sanctions on Russian oil flows in the long term.
Brent crude futures fell 46 cents, or 0.72%, to $63.74 a barrel, while US West Texas Intermediate crude futures fell 45 cents, or 0.75%, to $59.46 a barrel.
Exports from Russian black sea port of Novorossiysk and the Caspian Pipeline Union terminal, which together account for about 2.2 million barrels per day or nearly 2% of global supplies, were halted on Friday, pushing oil prices up more than 2% that day.
Traders are now focusing on assessing the long-term impact of Western sanctions on Russian oil exports.
The US Treasury Department said October sanctions on Rosneft and Lukoil are putting pressure on Moscow’s oil revenues and are expected to gradually reduce export volumes.
ANZ noted that Russian crude prices have started trading at a significant discount compared to global benchmarks, while Vivek Dar, a commodity strategist at the Commonwealth Bank of Australia, said any disruption caused by US sanctions would be temporary, given Russia’s ability to adapt to sanctions.
Former US President Donald Trump is ready to sign legislation imposing sanctions on Russia and any country that does business with it, including the possibility of including Iran.
For its part, Goldman Sachs predicted that oil prices will continue to fall until 2026 due to the abundance of supplies, with Brent crude likely to rise above $70 per barrel during 2026-2027 if Russian production falls sharply.
