Investing.com– Oil prices jumped in Asian trade on Monday, building on last week’s rally as markets reacted to the potential for significant supply disruptions after the United States imposed tougher restrictions. sanctions on Russian oil exports.

At 20:35 ET (01:35 GMT), it jumped 1.8% to $81.22 a barrel, and by the end of March rose 1.7% to $77.06 a barrel.

On Friday, oil prices rallied nearly 3% to their highest level in three months.

US sanctions to raise oil prices in Russia

The Joe Biden administration introduced its most comprehensive package of sanctions to date on Friday, aimed at cutting off Russian oil and gas revenues, which it considers to fund its ongoing conflict with Ukraine.

The US Treasury’s latest measures target Russia’s major oil producers, including Gazprom (MCX:) Neft and Surgutneftegas PJSC (MCX:), as well as 183 vessels involved in transporting oil to Russia.

These developments are expected to significantly disrupt Russian oil exports, forcing major importers such as China and India to seek alternative suppliers in regions such as the Middle East, Africa, and the Americas. .

This shift is expected to raise global oil prices and increase shipping costs. Analysts have suggested that the sanctions will severely affect Russian oil exports, leading independent Chinese refiners to reduce their refining output.

This upward trend reflects concerns over tight supply and the potential for increased demand from alternative sources. In addition, sanctions may prompt Russia to price its crude below $60 per barrel to remain competitive, further influencing market dynamics.

“The new measures are likely to give the Trump administration more leverage in future negotiations with Russia, as it decides if, when, and under what terms to lift sanctions. imposed by Biden,” analysts at JP Morgan said in a recent note.

Needs improvement as cold weather sweeps through US, Europe

Oil prices were also supported by expectations of increased demand as a cold snap swept through key energy markets in the United States and Europe.

Cold weather increases heating requirements, especially in regions that rely on oil fuel for domestic and industrial heating.

The Energy Information Administration (EIA) reported a notable drawdown in distillate inventories last week, further highlighting the surge in consumption amid the ongoing cold snap.

Industry participants are closely watching updates from major producers, including OPEC+, on potential supply adjustments to stabilize markets over the winter.