Sasol, BP, and Shell: Oil Giants in Focus as Prices Surge on US-Russia Sanctions

The US, one of the world’s largest economies, continues to stir volatility in the commodity space as President Donald Trump announced sweeping new sanctions on Russia’s two biggest oil producers, Rosneft and Lukoil. 

The move marks his administration’s first direct action against Moscow’s energy sector since the invasion of Ukraine, aimed at cutting off key funding for what Treasury Secretary Scott Bessent called Russia’s “war machine.” “I just felt it was time. We waited a long time,” Trump said, expressing frustration over stalled peace talks with President Vladimir Putin.

Impact on Russian Energy Giants

The sanctions effectively blacklist both companies, restricting their access to international markets and financial systems. Rosneft, led by an ally of President Putin, accounts for almost half of Russia’s oil production, while Lukoil operates across Russia and globally. Analysts believe the measures are intended to squeeze Russia’s economy and force it back to the negotiating table. “They may impact Russia’s willingness to negotiate peace if a deft diplomatic balance is struck,” said Dr Stuart Rollo of the University of Sydney’s Centre for International Security Studies.

Ripple Effects on Global Oil Prices

While the sanctions are meant to pressure Moscow, they also carry far-reaching global consequences. Russia’s oil exports to major customers like China and India could be disrupted, and countries continuing to trade with Rosneft and Lukoil risk facing secondary sanctions. In response, global oil prices spiked, with Brent crude jumping by 5% in just 24 hours, reflecting growing uncertainty in energy markets. US oil stocks closed higher as investors bet on tighter global supply and rising crude prices, with energy giants like ExxonMobil seeing gains.

Local and Global Market Reaction

Closer to home, South African investors also felt the impact. One of EasyEquities’ most popular stocks, Sasol, saw its shares climb more than 10% on Thursday, 23 October 2025 (during trading hours), as global oil prices surged. The rally underscored how deeply connected local markets are to global geopolitical shifts, showing once again that global politics can quickly shape investor sentiment and influence commodity-linked shares. The company also released a business update highlighting improved operational performance, further supporting the positive movement in its share price.

Thursday also saw British multinational energy giants Shell and BP experience gains, with their shares rising on optimism over higher global oil prices, as investors reacted to the potential for tighter supply, driving sentiment across both US and international energy stocks.

Inflation and Monetary Policy Implications

Rising oil prices triggered by the new sanctions could add pressure to global inflation, as higher energy costs often spill over into transport, manufacturing, and food prices. This can lead central banks to maintain tighter monetary policies for longer, weighing on economic growth and market sentiment. Investors may see increased volatility across sectors sensitive to input costs, particularly in industries like logistics, aviation, and manufacturing.

Diversification Through AMETFs

During such uncertain times, AMETFs could help cushion investors by offering diversified exposure across multiple sectors and asset classes. Rather than relying on single stocks that may fluctuate sharply with market swings, AMETFs spread risk and provide access to more stable, income-generating assets. 

The fund managers will be keeping their ears to the ground and taking factors like geopolitical tensions into account, rebalancing the fund when needed to extract performance and drive growth. This approach can help investors preserve value, smooth out returns, and stay invested through periods of heightened inflation and global instability.

Shaun Krom, Chief Investment Officer, EasyAssetManagement, explains, "One of the key themes we’ve focused on this year is multipolarity, the shift from a unipolar world long dominated by the United States to one where China and its allies are gaining greater influence. This evolving balance of power has fuelled ongoing geopolitical tensions, with the current situation serving as just one example.

As this rivalry intensifies, we’ve positioned ourselves to invest in or explore opportunities within emerging military technologies such as drones and space innovation, as well as strategic resources like uranium and rare earth elements. The current energy crisis highlights this broader global trend, one we expect to continue shaping markets in the years ahead."

Navigating Short-Term Volatility

In the near term, investors should brace for heightened market volatility as global markets react to shifting oil prices and renewed geopolitical uncertainty. Energy-linked sectors may experience sharp movements, while broader equity markets could fluctuate as investors weigh the potential impact on inflation and interest rates. Short-term trading sentiment is likely to be driven by headlines and rapid changes in commodity prices, creating a more reactive market environment.

Higher commodity prices could also boost earnings for resource-linked companies, potentially leading to larger dividend payouts or share buyback announcements, offering opportunities for income-focused investors. This period of volatility reinforces the importance of staying diversified and avoiding impulsive decisions based on short-term market swings.

Holding balanced exposure through instruments like AMETFs could help smooth out turbulence by spreading risk across multiple sectors and regions. While short-term fluctuations are inevitable, maintaining a long-term view and disciplined approach could remain key to navigating these unpredictable market conditions.

Sources – EasyEquities.

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