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Oil prices soar after US imposes sanctions on Russian oil companies - YAHOO FINANCE
Oil (BZ=F, CL=F)
Oil prices soared on Thursday morning, after the US imposed sanctions on Russia's two biggest oil companies, accusing Moscow of a lack of commitment to the peace process to end its war in Ukraine.
Brent crude (BZ=F) futures surged 3.4% to $64.72 per barrel at the time of writing, while West Texas Intermediate futures (CL=F) jumped 3.6% to $60.61 a barrel.
The US treasury announced sanctions against Rosneft and Lukoil overnight, which it said was "a result of Russia’s lack of serious commitment to a peace process to end the war in Ukraine".
The treasury said that the sanctions were aimed at increasing pressure on Russia's energy sector and impeding its ability raise revenue to fund the war and support its economy.
Trump told reporters in the Oval Office on Wednesday that he had cancelled planned talks with Russia's president Vladimir Putin.
He said: "It just didn’t feel right to me. It didn’t feel like we were going to get to the place we have to get. But we’ll do it in the future."
Concerns about a risk of disruption to oil (BZ=F, CL=F) supply as a result of the sanctions pushed oil prices higher.
Warren Patterson, head of commodities strategy at ING, said: "The key question is whether these sanctions are enough to deter buyers of Russian oil, specifically China and India."
"We must wait and see if these latest sanctions are more effective or if Russia can circumvent them, as it did with curbs earlier this year," he said. "Regardless, a tougher stance on Russia by the US administration marks a shift in policy."