To limit and not to get burned: what to expect from new sanctions

Alexey Belogoryev, Research and Development Director of the Institute for Energy and Finance, commented to Finance.Mail.ru on possible new US sanctions against the Russian-affiliated "shadow" tanker fleet and their alleged impact on Russian oil exports.

The position of the US administration is tightening — so far more in words — not only because of the upcoming elections in November, but also because of the expectation of a more surplus global balance of oil supply and demand in 2025, primarily due to weaker demand growth in China than many had recently assumed, Alexey Belogoryev explained.

In his opinion, the global market is now teetering on the verge of a transition to oversupply, and this creates room for maneuver for the United States when strengthening sanctions against Russia, Iran or Venezuela. Moreover, OPEC+ has almost exhausted the potential to reduce production and, accordingly, to regulate the balance sheet.

"But it is the union of "or" that is important here: to tighten sanctions simultaneously against the oil exports of two or even more so all three countries at once is too much stress for the market. And the United States now has no less claims against Iran because of the Palestinian-Israeli conflict and Venezuela because of the persecution of the opposition and doubts about the honesty of the presidential elections held in the summer than against Russia. Whether this choice has been made is not completely clear," Alexey Belogoryev believes.