Washington’s Oil Sanctions Rattle Asia’s Energy Security

Core Viewpoint - The U.S. federal government has imposed sanctions on Rosneft and Lukoil, two major Russian crude oil exporters, which together account for approximately half of Russia's total oil exports, leading to significant implications for global oil supply and pricing [1][2]. Group 1: Sanctions Impact - The new sanctions target the sales of Rosneft and Lukoil, effectively banning up to three-quarters of Russian oil exports from being sold through U.S.-dollar-based payment systems, which could impact around 3 million barrels of oil per day [2][3]. - The International Energy Agency (IEA) has predicted a global oil market surplus of 2.35 million barrels daily for this year, indicating that the volume of Russian oil exports under sanctions exceeds the anticipated surplus, potentially leading to a rapid rebalancing of the global oil market [3]. Group 2: Market Reactions - Following the announcement of sanctions, oil prices initially surged but then fell, reflecting market volatility and uncertainty regarding the long-term effects of the sanctions on supply security for major importers [1]. - Reports indicate that Chinese and Indian buyers are currently suspending orders from Russia, likely as a short-term reaction to the sanctions, although both countries have been exploring local currency payments for Russian oil, which may accelerate due to the new sanctions [4].