Oil prices have posted their best one-day gains in months after the US Government announced new sanctions against Russian oil producers.
The price of Brent Crude jumped about 5% overnight to about US$66 per barrel after President Donald Trump's administration announced the new sanctions against Rosneft and Lukoil, which are Russia's two largest oil exporters.
The move was a bid to pressure Russia into progressing moves towards peace with Ukraine.
The US Treasury Department said in a statement that the sanctions were "as a result of Russia's lack of serious commitment to a peace process to end the war in Ukraine''.
The Department added:
Today's actions increase pressure on Russia's energy sector and degrade the Kremlin's ability to raise revenue for its war machine and support its weakened economy. The United States will continue to advocate for a peaceful resolution to the war, and a permanent peace depends entirely on Russia's willingness to negotiate in good faith.
Image source: Getty Images
Modest gains among local producers
Australian energy stocks were slightly higher on Friday, except for Santos Ltd (ASX: STO), which has been facing negative publicity following the recent departure of its Chief Financial Officer.
Shares in Woodside Energy Group Ltd (ASX: WDS) were 1.1% higher at $24.42, Beach Energy Ltd (ASX: BPT) was up 1.2% to $1.27, and Karoon Energy Ltd (ASX: KAR) was 3.2% higher at $1.62.
Santos shares were 0.2% lower at $6.43.
Both The Australian and the Australian Financial Review have been reporting this week that the company's former CFO, Sherry Duhe, left the company in part due to a clash with managing director Kevin Gallagher, not in order to "pursue other interests" as the company has previously said.
Santos has not publicly elaborated on the matter.
Meanwhile, RBC Capital Markets has a bullish price target of $33 on Woodside shares, after the company announced it had struck an agreement this week to sell an 80% interest in a Louisiana gas supply pipeline project and a 10% stake in Louisiana LNG (liquefied natural gas) Holdco to US infrastructure company Williams.
RBC said the deal was consistent with their view that Woodside would bring strategic partners into that business.
We see Woodside's new partnership with Williams as helping to de-risk Louisiana feed-gas supply and pipeline development risk by introducing a leading and highly experienced US natural gas infrastructure partner. This transaction helps lower Woodside Louisiana LNG project capex and LNG offtake risk.
RBC said they expected Woodside to sell down further stakes in Louisiana LNG Holdco "with high quality partners involving additional LNG offtake''.
