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Citi Warns of Potential Oil Supply Disruption Amid New US Sanctions on Russia

The latest US sanctions on Russia's oil industry could significantly disrupt global oil supply, potentially affecting 300,000 to 800,000 barrels per day (b/d), according to a report by Citi. Announced on January 10, 2025, these sanctions target nearly 30% of Russia's crude oil exports, complicating logistics by affecting over 180 vessels in the shadow fleet. "We estimate the measures target nearly 30% of Russia crude oil exports, or roughly 800-k b/d," Citi analysts note. However, Russia might mitigate the impact by increasing refinery runs, potentially limiting the loss to 300,000 b/d. The sanctions have already influenced market dynamics, with ICE Brent futures M1/M2 spreads widening by 20 cents to nearly $1 per barrel. As geopolitical tensions rise, the oil market faces heightened uncertainty, with potential implications for global energy prices and economic policy.