Fuel Costs Spike on De Facto Sanctions

Brent futures came within a whisker of $120 per barrel Thursday as Russian aggression against Ukraine triggered yet more international sanctions. Russian oil isn’t officially embargoed yet but no one wants to be seen funding President Vladimir Putin’s war machine by buying it. Russia exported at least 4.5 million barrels per day of crude last year plus 2.8 million b/d of refined products, most of it to Europe which is now scrambling for alternatives. Crude grabs the headlines but international benchmark Brent’s 11.5% jump this week was dwarfed by the 23% spike in Europe's ICE low-sulfur gasoil futures. The region's diesel market is particularly exposed to de facto sanctions on Russian fuel. International benchmark Brent ended the week up $11.38/bbl at $110.46/bbl having struck a fresh multiyear high of $119.84/bbl during early trade Thursday. US price-pin West Texas Intermediate put on $14.86/bbl to finish the week at $107.67/bbl.