Prices swing higher amid renewed sanctions on Russian energy exports

Prices swung higher at the NBP on Thursday, tracking bullish crude oil prices and renewed sanctions on Russian energy exports.

According to data from ICE, the Brent Crude benchmark contract rose by 5.4% when compared to its previous close, a net increase of 8.2% since Monday.

The US Treasury announced new sanctions on Wednesday, targeting Russia’s two largest oil companies, Lukoil and Rosneft. Rosneft alone is responsible for around half of all Russian oil exports / 6% of global supply.

In 2024, Russia was the second largest crude oil producer in the world after the US, prompting a bullish response across global oil and adjacent markets such as natural gas.

Power prices also found support from strength across the wider energy complex.

While strong renewable generation (driven by the landfall of Storm Benjamin) continued to exert downward pressure on prompt contracts, the curve further out saw modest gains.

These gains were underpinned by a perceived uptick in geopolitical risk following the announcement of fresh sanctions targeting Russian energy exports, which added a layer of uncertainty to future supply dynamics.

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Price commentary courtesy of Crown Gas and Power