Crude oil price outlook: Sanctions on Russian oil, improved demand outlook may boost prices
sanctions on Russian oil, OPEC+ production curbs, and increased heating demand due to extremely cold winter in Western countries have aided the surge in prices.
Last week, the US imposed fresh sanctions against Russia’s energy industry, including blocks on two major Russian oil producers and insurance companies, along with sanctions on an unprecedented number of oil-carrying vessels. This move has threatened to crimp global oil markets supplies, which were already tightened due to OPEC+ production cuts.
The OPEC+ countries extended its low production policies in 2025. The producers’ group has pushed back the increase of oil output by three months until April and delayed the full unwinding of cuts to the end of 2026 due to feeble demand and a surge in production outside the group.
Cold weather gripped parts of the US and Europe, boosting the winter fuel demand. Extreme winter conditions may also lead to disruptions in oil supplies, causing speculation in oil prices.
Falling US stockpiles have further supported higher oil prices. As per the latest API inventory data, US crude oil inventories fell by more than 6.6 million barrels in the first two weeks of 2025.
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