Crude oil prices jump amid expectations of more Russian sanctions

Crude oil futures rose April 4 with the growing anticipation of new European sanctions on Russian oil barrels as evidence mounts of widespread, alleged war crimes in Ukraine.

French President Emmanuel Macron called for new sanctions that target crude oil and coal -- although Austria is already opposing Russian energy sanctions -- and US President Joe Biden proposed for a war crimes trial over the alleged atrocities, specifically referring to Russian President Vladimir Putin as a "war criminal."

As of 1600 GMT, NYMEX May WTI jumped $2.33 to $101.60/b -- back above the $100/b threshold -- while ICE June Brent grew by $1.91 to $106.30/b.

NYMEX May RBOB increased 2.87 cents to $3.1822/gal, while May ULSD surged by 10.76 cents to $3.5316/gal. Concerns of global diesel shortages have continued to mount.

While the US and UK are implementing bans on importing Russian Urals, the EU has yet to sanction Russian energy.

Macron's April 4 comments follow reports of the discovery of mass graves of civilian bodies in the Kyiv suburb of Bucha as Russian forces have withdrawn from the area.

"What happened in Bucha requires a new set of sanctions and very clear measures," Macron said. "There are very clear indications today of war crimes. It was the Russian army that was there at Bucha."

Russia has denied committing any war crimes.

Robert Yawger, director of energy futures at Mizuho Securities, said crude oil is largely up "on expectations of new sanctions on Russia after reports of war crimes in Ukraine."

However, he noted that several Russian oil tankers are still headed to the US -- although some already have lost their buyers -- attempting to offload as much crude as they can before the US ban on Russian oil formally takes effect after April 21.

The EU is particularly dependent on Russian oil and was importing about 2.7 million b/d of crude and another 1.5 million b/d products, mostly diesel, before Russia's invasion of Ukraine. Although there are no official EU-level sanctions in place for buying and using Russian oil, about 2 million b/d of Russian crude and 700,000 b/d of its oil product exports have already been disrupted as a result of refiners and traders "self-sanctioning", according to S&P Global Commodity Insights.

Crude prices dipped last week after Biden announced a record-high release of 180 million barrels of crude oil over six months from the US Strategic Petroleum Reserve.

The International Energy Agency is expected to announce as early as April 4 the specifics of its second planned emergency release of oil reserves from its member countries' stocks, including Japan and the UK, to counter surging prices and supply crunch brought by the Russia-Ukraine geopolitical unrest.

"The ministers noted that Russia's war in Ukraine continues to put significant strains on global oil markets, resulting in heightened price volatility," the IEA said in an April 1 statement. "This is taking place against a backdrop of commercial inventories that are at their lowest level since 2014 and a limited ability of oil producers to provide additional supply in the short term."