Donna Dong
Research Analyst, Flux
Brent Trades Up to $65.88/bbl
US warns Iraq of oil-revenue sanctions; China lifts Russian crude buys to records; Serbia gets fuel waiver; Kazakh-US energy talks continue
The Mar’26 Brent futures contract has broken the $65/bbl handle this afternoon, trading up from $65.15/bbl at 13:00 GMT to $65.88/bbl at 17:00 GMT (time of writing).
In the news, the US has warned top Iraqi officials that they could face sanctions targeting the Iraqi state, including its vital oil revenues, if armed groups backed by Iran are included in the next government. Washington has never restricted the flow of dollars from Iraq's oil revenues, which are transferred through the Federal Reserve Bank of New York to the Central Bank of Iraq. Since the 2003 invasion, the US has effectively controlled Iraq's oil revenue. Additionally, Trump, who bombed Iran's nuclear sites in June, threatened to intervene militarily again during last week's protests. Elsewhere, Serbian state broadcaster RTS reported that the US Treasury Department has renewed a sanctions waiver for Serbia's Russian-owned NIS, allowing the country an additional month to import winter fuel supplies; the new waiver is expected to last until 20 February. In other news, China is increasing its imports of Russian oil in January, taking in barrels that would previously have gone to India and Turkey as Western sanctions force Moscow to reroute its exports. According to LSEG data, China is expected to receive nearly 1.5mb/d of Russian oil by sea this month, up from 1.1mb/d in December. Additionally, Beijing, already a major buyer of Russian Far East ESPO Blend, has also increased its imports of Russian Urals oil to a record 405kb/d in January, the highest level since mid-2023, as per Kpler data. In Kazakhstan, the Energy Ministry stated that it held discussions on energy cooperation with the US Department of Energy and the US embassy in the country. The ministry noted that the two parties talked about "the implementation of Kazakhstan's strategic priorities in the oil and gas sector." Finally, the front-month (Mar/Apr) spread and 6-month (Mar/Sep) Brent futures spreads are at $0.80/bbl and $2.08/bbl, respectively.
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