Oil rises on expectations for global supply disruptions

Oil drilling rigs

Oil prices rose today, Jan. 15 as the US imposed stricter sanctions on Russia, which sparked concerns over potential disruptions to global supplies. This came despite forecasts from the US Energy Information Administration (EIA) indicating a supply surplus over the next two years.

Brent crude futures for March delivery increased by 0.50%, or 40 cents, to $80.32 a barrel as of 9:24 a.m. KSA time.

WTI crude futures for February delivery rose by 0.70%, or 54 cents, to $78.04 a barrel.

Brent lost 1.35% on Jan. 14 after the EIA reported that oil prices are expected to face downward pressure over the next two years due to a supply surplus exceeding demand.

According to EIA, Brent prices are predicted to drop 8% to an average of $74 a barrel in 2025 and continue to fall to $66 a barrel in 2026.

However, the new sanctions imposed by the US on Russia’s oil sector—including targeting 183 Russian tankers at the end of last week—remained the primary driver of the oil market.

A report released yesterday by the American Petroleum Institute (API) showed that US crude oil inventories fell by 2.6 million barrels last week, while gasoline and distillate inventories rose by 5.4 million barrels and 4.9 million barrels, respectively.

Investors are now awaiting the release of official inventory data from the EIA later today, with expectations of a 1-million-barrel decline in crude stocks for the second consecutive week.