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Brent and WTI rise 1%

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Gasoil futures at highest since February 2024

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EU to stop importing fuels from Russia

(Updates prices at 1151 GMT)

By Robert Harvey

LONDON, July 18 (Reuters) - Crude oil futures rose on

Friday while gasoil futures jumped to a 17-month high as

investors weighed new European Union sanctions against Russia.

Brent crude futures climbed 73 cents, or 1.05%, to

$70.25 a barrel by 1151 GMT. U.S. West Texas Intermediate crude

futures gained 83 cents, or 1.23%, to $68.37.

The premium on low-sulphur gasoil futures to Brent crude

was up $3.50 at $27.27, the almost 15% increase

lifting the spread to its highest since February 2024.

The EU reached an agreement on an 18th sanctions package

against Russia over its war in Ukraine, which includes measures

aimed at dealing further blows to Russia's oil and energy

industries.

Its latest sanctions package will lower the G7's price cap

for buying Russian crude oil to $47.6 a barrel, diplomats told

Reuters.

The EU will also no longer import any petroleum products

made from Russian crude, though the ban will not apply to

imports from Norway, Britain, the U.S., Canada and Switzerland,

EU diplomats said.

EU foreign policy chief Kaja Kallas also said on X that the

EU has designated the largest Rosneft oil refinery in

India as part of the measures.

Higher gasoil futures could be driven by an EU ban on fuel

imports derived from Russian crude, UBS analyst Giovanni

Staunovo said, as well as low inventories in northwest Europe.

The EU and UK have imported about 196,000 barrels per day of

refined fuel from India so far this year, the majority of which

was diesel, gasoil and jet fuel, according to data from

analytics business Kpler.

Europe produces less diesel and jet fuel than it consumes,

making it reliant on imports from other regions.

"This shows the market fears the loss of diesel supply into

Europe, as India had been a source of barrels," said Rystad

Energy's vice president of oil markets, Janiv Shah.

Investors were considering the potential impact of the price

cap change and vessel designations on crude markets.

Investors are awaiting news from the U.S. on possible

further sanctions after President Donald Trump this week

threatened sanctions on buyers of Russian exports unless Moscow

agrees a peace deal in 50 days.

"Ultimately, it is now a matter of waiting for possible

major changes in U.S. sanctions and tariff policy," Commerzbank

analysts said in a note.

The U.S. has not backed Europe on the latest sanctions

package, leaving the EU with limited power to enforce the

measures.

"We expect limited impact from the lower price cap and

tanker sanctions; landed prices for diesel in Europe could

increase somewhat due to larger logistics issues to get products

into Europe, but we think enforcement challenges limit the

impact on flows," said BNP Paribas analyst Aldo Spanjer.

Prices could also have received support after Reuters

reported that a restart of Iraq's Kurdish oil exports is not

imminent despite Iraq's federal government saying on Thursday

that shipments would resume immediately.