Imposing sanctions against Rosneft and Lukoil: expert explained how it will affect the global oil market
Kyiv • UNN
The US Treasury Department imposed sanctions against Rosneft and Lukoil, which led to a 3% increase in oil prices. Expert Oleh Pendzyn predicts price stabilization, despite a possible market deficit.
After the US Treasury Department imposed sanctions against leading Russian oil companies Rosneft and Lukoil, oil prices rose. In a comment to UNN, economic expert and executive director of the Economic Discussion Club, Oleh Pendzyn, noted that a certain oil deficit may be created today, but not a significant one, however, oil prices, in his opinion, should stabilize.
Details
Yesterday, October 22, the United States Department of the Treasury officially imposed sanctions against leading Russian oil companies Rosneft and Lukoil.
In addition to Lukoil and Rosneft themselves, the Office of Foreign Assets Control of the US Treasury Department also imposed sanctions against their subsidiaries – all enterprises directly or indirectly owned by these corporations by at least 50%.
Brent and WTI crude futures jumped 3% after the US imposed sanctions on Rosneft and Lukoil, forcing Indian buyers to reconsider purchases. This led to a rise in oil prices, but experts doubt a long-term structural shift in the market.
Oil prices rose by 3% after US sanctions against Rosneft and Lukoil23.10.25, 08:39 • 3565 views
The global oil market, firstly, is very emotional. Traders quite naturally believe that after the introduction of these sanctions, the total volume of Russian oil supply on the world market should decrease. It will take some time for Russia's competitors to increase daily production, and for this to be formalized by appropriate logistical lines and routes. That is, physically today, a certain deficit may be created on the oil market, which led to an increase of almost 3.5% in world oil prices to 60 dollars/barrel for Brent crude.
According to the expert, further oil price increases should not be expected.
I don't think so. The market will stabilize and wait for the relevant volumes to be re-registered. Oil companies do not only extract oil. These are also insurance companies that insure risks. This is also a logistics center, these are also companies that lease ships. This is also the rental of tankers for filling with oil. These are also trading companies that ensure the promotion of oil to the international market. As soon as sanctions are imposed against certain companies, they begin to worry about not falling under secondary sanctions. This can unequivocally lead to a sufficiently large number of companies that have other sources of oil, simply refusing to cooperate with these sanctioned companies.
Answering the question of how significant the blow to the Russian economy from these sanctions is, Pendzyn noted: "Everything strongly depends on who specifically will refuse Russian oil."
China definitely won't. It will simply diversify the ways of obtaining this oil, but not yet. India - possibly, but India is looking for alternative opportunities from the 18th package of European sanctions. Unless Turkey refuses. We need to see what the reactions of the world oil market to such things will be.
China reacted to US sanctions against Rosneft and Lukoil: opposes them23.10.25, 11:59 • 4590 views