Oil prices up as West plans new sanctions against Russia

Oil prices up as West plans new sanctions against Russia

LONDON: Oil prices went up on Tuesday April 5 as the United States and Europe planned new sanctions to punish Russia over alleged war crimes in Ukraine, raising concerns over tighter global supply and Iran's nuclear talks with world powers stalled.

Crude oil prices could go up in the near term with the European Union working on new sanctions that could target Russia's oil industry, according to FXTM analyst Lukman Otunuga.

The West is planning to impose new sanctions against Russia over civilian killings in Ukraine, with US President Joe Biden's national security adviser saying that new US sanctions against Moscow would be announced this week.

There were mounting expectations that Europe would take action to reduce transactions with Russia's energy sector, further squeezing supplies, said Jeffrey Halley, senior analyst at OANDA.

To calm oil prices, U.S. allied countries agreed last week to a coordinated oil release from strategic reserves for the second time in a month. The International Energy Agency IEA is still examining details of the release, according to Japanese industry minister Koichi Hagiuda on Tuesday.

After his comments, oil prices went up by more than US $2.

Ole Hansen, head of commodity strategy at Saxo Bank, expects oil prices to trade between US $90 and US $120 a barrel during the second quarter.

He said key events that could cause additional uncertainty include an Iran nuclear deal, Venezuela being allowed to increase production and an increase in US shale oil production.

The United States still believes that there is an opportunity to overcome the remaining differences with Iran in talks over its nuclear program, State Department spokesman Ned Price said on Monday.

Any signs that the US and Iran are moving closer to a nuclear deal, which would return up to 1.3 million barrels of Iranian oil per day to global markets, will weigh on oil prices, according to BCA research.

The end of the refinery maintenance period in Europe lent some support to oil prices, analysts said, because it will allow higher crude intake.