Oil prices spiked on Thursday after the U.S. announced massive new sanctions on Russia’s oil industry in an attempt to get Russian President Vladimir Putin to the negotiating table and end Moscow’s brutal war on Ukraine.
U.S. benchmark crude jumped about 6 per cent to around $62 (U.S.) per barrel midday Thursday and analysts say if the situation remains static, consumers will soon be paying more at the pump.
Patrick De Haan, head of petroleum analysis for GasBuddy in the U.S., said while it was difficult to predict with certainty because of the number of moving parts, consumers will likely see a bump in prices as early as next week, if not sooner.
“We’ll probably start to see motorists be impacted by the sanctions at the pump in the next couple days and it might take five days for that to be fully passed along,” De Haan said, adding that the full impact also depends on whether the Russian or U.S. positions change.
“Russia will feel pressure to come to the table in light of of the new developments or President Trump may react when he sees oil prices rising to levels that become uncomfortable, so I don’t think this is going to be very long lasting,” De Haan said.
Oil prices have been relatively low for the past few years and last week the cost for barrel of U.S. benchmark crude fell below $57, its lowest level since early 2021.
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The sanctions against Russian oil giants Rosneft and Lukoil follows calls from Ukrainian President as well as bipartisan pressure on Trump to hit Russia with harder sanctions on its oil industry, the economic engine that has allowed Russia to continue to execute the grinding conflict even as it finds itself largely internationally isolated.
The European Union on Thursday announced its own measures targeting Russian oil and gas.
The price for Brent crude, the international standard, rose $3.57 on Thursday to $66.15 (U.S.) per barrel.
The price of Western Canada Select, the benchmark Canadian price, also jumped by about 3 per cent to around $46 (U.S.) per barrel.
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