International crude oil prices fell nearly 3 percent in the last session after commodity traders hit supply disruptions after the broadest U.S. sanctions package targeting Russian oil and gas revenues amid ongoing military strikes on Ukraine. The increase reached a three-month high.

Brent crude futures settled at $79.76 a barrel, up $2.84, or 3.7 percent, after crossing $80 a barrel for the first time since Oct. 7. U.S. West Texas Intermediate crude futures settled up $2.65, or 3.6 percent, at $76.57 a barrel. , a three-month high.

Both crude oil contracts rose more than 4 percent in their high session after European and Asian traders circulated an unconfirmed document detailing the sanctions. Back home, crude oil futures were last settled 3.14 percent higher. ₹6,572 per barrel on the Multi Commodity Exchange (MCX).

Brent at 3-month high: What is driving crude oil prices?

– US President Joe Biden’s administration this week imposed fresh sanctions on Russian oil producers, tankers, brokers, traders and ports, aimed at affecting every step of Moscow’s oil production and distribution chains.

– Sources in Russian oil trading and Indian refining told news agency Reuters that the sanctions would affect its major buyers, India and China. Russian oil exports will be adversely affected. The sanctions will reduce Russian oil exports and make them more expensive.

-U.S. ultra-low sulfur diesel futures, formerly known as the heating oil contract, rose 5.1 percent to settle at $105.07 a barrel, the highest since July. Analysts say India and China are currently scrambling to find alternatives.

-The timing of his sanctions, just days before President-elect Donald Trump’s inauguration, makes it likely that Trump will keep the sanctions in place and use them as a negotiating tool for a Ukraine peace deal.

-Oil prices also rose as extreme cold in the US and Europe boosted demand for heating oil. “We expect a significant annual increase in global oil demand of 1.6 million barrels per day in the first quarter of 2025, led by heating oil, kerosene and LPG,” JPMorgan analysts said in a note on Friday. Demand has increased.”

Where are prices going?

Expectations of rising demand boosted crude oil futures. Prolonged cold temperatures in the Northern Hemisphere are expected to increase heating fuel consumption. A report showing U.S. crude stockpiles fell for the seventh consecutive week indicated strong demand. However, gains were hampered by weak demand in China, where inflation is nearing zero, and a strong US dollar, making oil less attractive to international buyers.

“Russia’s crude oil exports fell to their lowest level since August 2023, raising supply concerns. We expect crude oil prices to remain volatile. Crude oil support at $73.05-72.50 , and resistance is at $74.20-74.90. Crude Oil has support in INR. ₹6,320-6,250 while at resistance ₹6,480-6,540, said Rahul Kalantari, VP Commodities, Mehta Equities Ltd.