US and allies prepare new sanctions against Russian oil industry

The Wall Street Journal reports.

The WSJ says that in meetings across Europe this week, US Ministry of Finance officials are discussing details of upcoming sanctions on Russian oil products, which are set to take effect on February 5.

Sanctions will set two price limits for Russian petroleum products: cheaper ones, such as fuel oil, and more expensive ones, such as diesel fuel.

New restrictions are expected to have a more serious economic impact: they will come into effect at the same time as the EU bans imports of Russian diesel fuel and other petroleum products.

"Europe has relied on Russia for diesel fuel for decades, raising fears about the impact of the February penalties. For now, European fuel suppliers appear to have stocked up on diesel ahead of the Western restrictions," the WSJ says.

Philip Jones-Lux, analyst at Geneva-based oil company Sparta Commodities, said physical diesel prices in Europe are currently not high enough to encourage traders to ship diesel from the US, Saudi Arabia and India.

“What this is telling us is that, at the moment, there is no sign, on the pricing at least, that anyone is worried about European diesel supply come February,” he noticed.

• European Union has promised to introduce sanctions against Belarus and Iran for military support of Russian Federation in war against Ukraine.