Rising oil prices fuel debate on sanctions against Russia, Iran
Brokers report that oil prices on the New York commodity exchange are rising following reports about the possibility of tightening sanctions against oil supplies from Russia and Iran.
A barrel of West Texas Intermediate for delivery in January costs $70.36 CAD on the NYMEX in New York, up 0.10%.
Brent on ICE for February is priced at $73.69 CAD a barrel, up 0.23%.
Oil prices in the U.S. are rising
Investors are assessing comments from the U.S. regarding the potential tightening of restrictions on oil flows from Russia and Iran.
U.S. Treasury Secretary Janet Yellen said that a weaker situation on global oil markets could be an opportunity to take further action against the Russian energy sector as the U.S. continues efforts to hinder Russia's conduct of war with Ukraine.
"What’s unusual about this moment is that the oil market seems to be well supplied. Prices are relatively low, global demand is down and there really has been an increase in supply," Yellen said in an interview with Bloomberg TV.
"So the global oil market is softer and that creates possibly an opportunity to take some further action," she emphasised.
Sanctions previously introduced by President Joe Biden's administration against Russia are aimed at limiting Russia's revenues, including from oil sales, while striving to avoid restrictions on global commodity supplies, which could pressure rising prices during high inflation.
The outgoing Biden administration wants to impose even tougher sanctions against the lucrative Russian oil trade, according to sources familiar with the matter.
The goal of these restrictions is to put even more pressure on the Kremlin's "war machine" before President-elect Donald Trump takes office in January 2025.
"We have been focused since the outset on Russian oil revenue, it’s a critical component of the Russian budget and we’ve been looking for creative ways to try to reduce Russia’s revenue," Yellen said on Bloomberg TV.
Meanwhile, President-elect Donald Trump's candidate for National Security Advisor, Mike Waltz, announced in an interview with Fox News a return of the U.S. to the campaign of maximum pressure on Iran, which defined Trump's policy during his first term in the White House, even though leaders in Tehran signal they wish to ease tensions in relations with the U.S.
U.S. announces changes towards Iran
"You’re going to see a huge shift on Iran (after Trump takes office Jan. 20 - ed.)," said Waltz.
"We have to constrain their cash. We have to constrain their oil. We have to go back to maximum pressure, number one, which was working under the first Trump administration," Waltz stated on Fox News.
Waltz's comments reflect, according to analysts, the consensus of Donald Trump and several of his nominees for various positions in the new administration, including Secretary of State and Secretary of Defense, that President Joe Biden has not been firm enough in enforcing sanctions against the Iranian regime.
During his term, Joe Biden has indeed tightened sanctions against Iran for its support of organizations such as Hamas and Hezbollah, as well as for strengthening ties with Russia.
The U.S. President has also expanded American sanctions on Iran's oil and gas sector in response to Iran's missile attack on Israel.
However, Iranian oil exports ignore years-long restrictions imposed by the U.S. and have returned to nearly full capacity.
