Oil Prices Rally To Highest Level In Over Three Months, Rupee Crashes To All-Time Low

Earlier on Friday, the US Treasury levied sanctions on Russian oil producers Gazprom Neft and Surgutneftegas, and imposed restrictions on 183 vessels that shipped Russian oil.

The Brent crude futures surged 1.69 per cent and $1.35 to reach $81.11 per barrel in the early morning hours on Monday.

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Oil prices soared on Monday and hit their highest level in more than three months. This rally was backed by expectations of wider US sanctions which would impact Russian crude supplies to China and India.

China accounts for the largest crude imports in the world, while India is the third-largest importer of the product globally. According to Reuters, the Brent crude futures surged 1.69 per cent and $1.35 to reach $81.11 per barrel in the early morning hours on Monday.

This was seen after the prices hit an intraday high of $81.44. This also marked the highest level for the crude prices seen since August 27, 2024.

The report showed that the US West Texas Intermediate crude climbed $1.40 or close to 2 per cent to hit $77.97 per barrel after hitting a high of $78.32. This was the loftiest price since October 8, 2024.

Earlier on Friday, the US Treasury levied sanctions on Russian oil producers Gazprom Neft and Surgutneftegas, and imposed restrictions on 183 vessels that shipped Russian oil. This move was taken to target the revenue used by Russia to finance its war with Ukraine.

Traders and analysts noted that Russian oil exports will take a major hit due to the new sanctions. This move will push China and India, which are top buyers, to look for more oil from the Middle East, Africa, and the Americas. This will end up boosting prices and shipping costs.

Harry Tchilinguirian, Head of Research, Onyx Capital Group, noted, “The last round of OFAC sanctions targeting Russian oil companies and a very large number of tankers will be consequential in particular for India.”

Meanwhile, the impact of the rally in oil prices was seen on the domestic currency as the Indian rupee depreciated 27 paise to reach a fresh alltime low of 86.31 against the US dollar on Monday. Sustained foreign outflows along with the jump in crude oil prices maintained pressure on the domestic unit, experts noted.