Reported by: Joe Wallace

Sanctions on Russia will redraw global oil flows over the next three months. Confusion over how the measures will work is making it hard for the energy industry to prepare.

Ukraine’s allies are gearing up to hit Russian oil with the toughest restrictions to date starting in early December, an attempt to stem President Vladimir Putin’s influx of fossil-fuel revenue.

Negotiations inside the Biden administration and with its overseas partners are going down to the wire, creating uncertainty for traders, refiners and other players in the energy market. Adding to the angst, Moscow has threatened to hit back by choking off supplies.

Crude prices have risen since mid-October and would likely zoom higher if Mr. Putin follows through on that warning, traders say. Another risk is that Russia’s oil-export logistics struggle to adjust to the sanctions, taking crude off the market regardless of the Kremlin’s response. Brent crude, the global oil benchmark, is close to $100 a barrel for the first time since August. 

But the real impact, traders say, is showing up in the eye-watering prices that Europeans are paying for diesel. The diesel market is particularly susceptible to the loss of Russian supplies because Europe has long relied on Russian refiners for the agricultural, industrial and trucking fuel.

Read full report: https://www.wsj.com/articles/sanctions-on-russian-energy-weigh-on-oil-market-11667821600