Oil prices rise amid European sanctions and geopolitical tensions
Oil prices rise for the second day in a row
Oil prices recorded strong gains during today's trading on Friday, driven by sensitive political and geopolitical decisions, led by the new sanctions imposed by the European Union on Russia, and the ongoing attacks on oil facilities in the Kurdistan region of Iraq.
The price of Brent crude rose by 1.7%, exceeding the barrier of 70 dollars per barrel, while the US oil index (WTI) climbed by 1.9% to more than 67 dollars per barrel.
EU tightens sanctions on Russian oil
The European Union approved the eighteenth package of sanctions against Russia, which included adjusting the price cap for Russian oil exports from 60 dollars to 47.60 dollars per barrel, in a new attempt to reduce Moscow's revenues from the energy sector.
The sanctions also included a ban on the use by European companies of the Nord Stream pipeline, the strategic offshore system for transporting Russian gas to Germany via the Baltic Sea, increasing pressure on the Russian energy sector.
This decision led to a significant increase in oil and diesel futures, especially in light of the continued scarcity of fuel stocks globally.
Summer demand and violence in the Middle East support prices
In addition to political factors, the wave of seasonal demand for fuel during the summer continues to contribute to the support of oil prices.
Kurdistan's production declined due to attacks
The security turmoil in the Middle East has increased tensions, as the oil infrastructure in Iraqi Kurdistan has been subjected to multiple drone attacks over the past four days.
Repeated attacks on Kurdish oil fields led to a sharp decrease in the region's production, from about 280 thousand barrels per day to only about 130 thousand barrels.
Iranian-backed militias are believed to be behind the attacks, although no one has yet claimed responsibility.
This sudden decline in supplies added further impetus to the rise in prices, at a time when the market is already in short supply.
What are the expectations now,and will Oil continue to rise?
Current indicators show that oil prices may continue to rise in the near term if geopolitical unrest continues, especially if further sanctions or escalation are implemented in key production areas.
