Oil prices surged by nearly 3% last Friday, hitting a three-month peak, following new sanctions imposed by President Joe Biden’s administration on key elements of Russia’s energy sector. These sanctions target oil producers, tankers, traders, intermediaries, and Russian ports. Brent crude futures climbed by 3.05%, closing at $79.45 per barrel, briefly surpassing the $80 mark for the first time since October 7th. WTI crude futures also saw an increase, rising by 3.07% to settle at $76.57 per barrel, marking their highest point in three months.
The sanctions were part of the broad strategy of the U.S. to drive peace negotiations regarding the ongoing conflict in Ukraine. On Friday, the U.S. Treasury Department rolled out its most extensive sanctions to date, targeting the revenue-generating oil and gas industries of Russia. Among the sanctioned entities are Gazprom Neft and Surgutneftegas, two major players in Russia’s oil exploration, production, and sales. The new restrictions also extend to the networks facilitating the trading of Russian petroleum products.
Additionally, the Treasury lifted a previously existing exemption that allowed certain energy-related transactions to bypass sanctions. This move is expected to deal a heavy blow to Russia’s finances, potentially costing the country billions of Dollars monthly if enforced strictly. However, the sanctions include a grace period until March 12th, allowing Russian companies to complete existing energy contracts before facing full restrictions.
Despite this delay, the sanctions are expected to disrupt Russia’s oil exports, especially to key markets like India and China. The outcome of these sanctions may hinge on the policies of the incoming president of the US, whose stance on the war could shift the diplomatic landscape.
On Monday, oil prices continued their upward trajectory, rising by about 2%, reaching a four-month high. This increase was attributed to market expectations that the U.S. sanctions would push India and China to find alternative oil suppliers.
However, by Tuesday, oil prices saw a slight pullback following a forecast from the U.S. Energy Information Administration (EIA), which projected steady oil demand in the U.S. for 2025, along with a revised upward supply forecast. Brent crude futures fell by 0.72% to $80.32 per barrel, while WTI crude dropped by 0.88%, closing at $78.09 per barrel.
Despite expectations of tighter supply due to sanctions, uncertainties around demand from China, one of the largest global oil consumers, persist. Chinese crude oil imports dropped in 2024, marking their first decline in two decades, excluding the pandemic years. This reduction in Chinese demand could dampen the impact of any supply shortages on the global market.
Looking ahead, the EIA’s latest Short-Term Energy Outlook suggests that oil prices may face downward pressure in the coming years as global production is expected to outpace demand growth. The agency forecasts a decrease in Brent crude prices to an average of $74 per barrel in 2025, with a further drop to $66 per barrel in 2026. WTI prices are projected to average $70 per barrel in 2025, before falling to $62 per barrel by 2026.
The EIA also raised its U.S. oil production estimate for 2025, predicting a slight increase from 13.52 million barrels per day (bpd) to 13.55 million bpd, setting a new record. The report highlights the growing importance of the Permian Basin, which is expected to contribute over half of the country’s oil output by 2026.
Globally, the EIA revised its 2025 oil and liquid fuel production forecast upward to 104.4 million bpd, an increase from the previous estimate of 104.2 million bpd. This adjustment reflects OPEC+’s decision to ease production restrictions and expectations of higher output from non-OPEC producers. In contrast, the agency lowered its 2025 global oil demand forecast to 104.1 million bpd, down from its earlier projection of 104.3 million bpd, signaling a slower recovery to pre-pandemic demand levels.
The world of cryptocurrency is currently experiencing a period of heightened volatility, with major fluctuations in the prices of Bitcoin and Ethereum. Bitcoin, for instance, dropped to as low as $89,941 on January 13, 2025, before rebounding to the $96,000 region. These sharp price movements reflect the speculative nature of the crypto markets, which continue to be unpredictable. However, despite these fluctuations, institutional interest in Bitcoin remains strong. A significant development in this regard is Italy’s largest bank, Intesa Sanpaolo, making its first direct investment in Bitcoin, acquiring $1 million worth of the cryptocurrency. This move highlights the growing acceptance of digital assets by traditional financial institutions.
Ethereum has also been experiencing notable price movements. After a 20.7% weekly correction between January 6 and January 13, ETH dropped to a low of $2,924, triggering significant liquidations in leveraged positions. Despite this setback, the futures market shows strong interest in Ethereum from both retail and institutional buyers, signaling optimism in the long term. While Ethereum posted substantial gains in 2024, its failure to reach new all-time highs and the outperformance of competitors like Solana and BNB have contributed to a more subdued sentiment among traders. This dynamic suggests that Ethereum may face challenges in the short term, even as interest from market makers and large investors remains.
As we approach President-elect Trump’s inauguration, there is growing anticipation regarding his stance on cryptocurrency. Trump is expected to issue executive orders related to crypto policy on his first day in office, and the ‘Crypto Ball’ event in his honour underscores the importance of crypto in his political agenda. The market is likely to remain volatile in the lead-up to his inauguration, as traders brace for potential regulatory changes that could significantly impact the crypto space.
In the regulatory arena, the SEC is facing significant scrutiny, particularly regarding its legal actions against Elon Musk. The SEC has sued Musk over alleged securities violations, a development that has added to the tension between regulators and crypto figures, especially given Musk’s pro-Trump stance. The ongoing battle between Musk and the SEC highlights the challenges that regulators face in managing the intersection of traditional financial markets and the rapidly evolving world of crypto.
Ripple CEO, Brad Garlinghouse, has been outspoken in his criticism of SEC Chair, Gary Gensler, accusing him of disregarding the 2024 election and continuing a ‘failed regulation-by-enforcement’ approach. As Gensler prepares to leave his post, many in the crypto community are hopeful that his departure will lead to a more favourable regulatory environment for the industry.
Finally, the SEC is also under pressure from the courts, as a US court has demanded that the SEC explain its decision to deny Coinbase’s request for crypto-specific regulations. This move further exposes the tensions between the crypto industry and regulators, with many calling for greater clarity and transparency in how cryptocurrencies should be regulated.
All of these factors—volatile market conditions, institutional adoption, regulatory uncertainty, and the upcoming political shifts—are contributing to a dynamic and unpredictable environment for the cryptocurrency market. The next few days leading up to Trump’s inauguration could bring significant changes, and traders and investors are closely monitoring developments that could reshape the landscape of crypto in the coming months.
