IRISH drivers could soon face another surge in fuel prices as oil markets reel from US sanctions against Russian oil producers Rosneft and Lukoil over the ongoing war in Ukraine.
Brent crude climbed by around 5% to settle near $66 a barrel, while US West Texas Intermediate (WTI) crude ended just below $62.
It marked the steepest daily gains for both since mid-June.
The US Treasury Department said the sanctions were part of a broader effort to cut off funding for Russia’s war machine.
Analysts warned the move could tighten global supplies, as Russia was the world’s second-largest crude producer in 2024, trailing only the United States.
“The sanctions on Rosneft and Lukoil represent a significant escalation in the targeting of Russia’s energy sector and could shift the oil market toward a deficit next year,” said David Oxley, chief climate and commodities economist at Capital Economics, according to Reuters.
The sanctions immediately caused petrol prices to spike.
Ireland, which imports all its crude oil, is particularly exposed to any global supply shock.
Industry sources reported that Chinese state oil firms had paused purchases of Russian seaborne crude linked to the two companies, while Indian refiners were also weighing cuts.
Reliance Industries, India’s largest private refiner, is reportedly preparing to reduce or suspend imports altogether to avoid exposure to Western financial restrictions.
The reaction in refined fuel markets was equally sharp.
US diesel futures spiked nearly 7%, lifting refining profit margins, known as crack spreads, to their highest levels since February 2024.
Kuwait’s oil minister said the Organization of the Petroleum Exporting Countries (OPEC) stood ready to offset any supply shortfalls by adjusting production cuts.
This statement helped cool prices slightly toward the end of the session.
Russian President Vladimir Putin dismissed the sanctions as “an attempt to put pressure on Russia”, insisting that the global market would struggle to replace Russian supplies quickly.
Britain and the European Union have also expanded their own sanctions against Russia.
The EU’s latest package includes a ban on Russian liquefied natural gas imports and blacklists two Chinese refiners and a PetroChina trading unit for their links to Russian energy flows.
UBS analyst Giovanni Staunovo noted that Russian exports make up about 7% of global supply, a major share that will be difficult to redirect without raising costs or disrupting logistics.
The rise in global oil prices is already having knock-on effects across Ireland, where drivers and businesses are facing renewed pressure at the pumps.
The gap between fuel prices north and south of the border has widened in the last two years, especially since the reinstatement of excise duties, which had been temporarily cut during the early stages of the Ukraine war to ease the cost of living.
This has made costs unsustainable for many small petrol stations, with a difference of almost 25%, leading many drivers to travel to Northern Ireland for cheaper petrol and diesel.
In Donegal, the Texaco station in Muff was forced to close after losing €100,000 last year, with its owner citing higher excise and carbon taxes in the Republic as the deciding factor.
Kevin McPartlan, chief executive of Fuels for Ireland, said that “businesses along the border are really feeling the pinch”, with several already forced to close, according to RTÉ.
The group has urged the government to reconsider current tax levels to help stabilise the price difference.
The Department of Finance acknowledged that a range of factors, including wholesale pricing and exchange rate fluctuations, affect final fuel costs.
It also noted that cross-border “fuel tourism” is a natural consequence of the lower cost in Northern Ireland.
For Irish people, rising global oil prices combined with carbon taxes mean higher costs for driving, agriculture and home heating.
See More: Northern Ireland, Oil, Russia, Russia-Ukraine War, Sanctions, USA
