BENGALURU/NEW YORK/LONDON: Oil prices jumped yesterday to their highest levels since 2008 as the United States and European allies considered banning Russian oil imports while it looked less likely that Iranian crude would return switftly to global markets.
Brent rose US$5.1, or 4.3%, to settle at US$123.21 (RM514.71) a barrel, and US West Texas Intermediate (WTI) rose US$3.72, or 3.2%, to settle at US$119.40 a barrel. During the session, both benchmarks hit the highest since July 2008 with Brent hitting US$139.13 a barrel and WTI US$130.50.
“The bigger picture is that supply disruptions are getting worse,” said Andrew Lipow, president of Lipow Oil Associates in Houston. “Nobody wants to touch anything related to Russia.”
Global oil prices have spiked about 60% since the start of 2022, raising concerns about global economic growth and stagflation. China, the world's No. 2 economy, is targeting slower growth of 5.5% this year.
On Sunday, USSecretary of State Antony Blinken said the US and European allies were exploring banning imports of Russian oil. The White House said yesterday President Joe Biden has not made a decision on a ban on Russian oil imports.
Analysts at Bank of America said if most of Russia's oil exports were cut off, there could be a shortfall of 5 million barrels per day (bpd) or larger than that, pushing prices as high as US$200.
Russia is the world's top exporter of crude and oil products combined, with exports of around 7 million bpd, or 7% of global supply. Some volumes of Kazakhstan's oil exports from Russian ports have also faced complications.
Meanwhile, talks to revive Iran's 2015 nuclear deal with world powers were mired in uncertainty after Russia demanded a US guarantee that sanctions it faces over the Ukraine conflict would not hurt its trade with Tehran. China also raised new demands, sources said.
Separately, US and Venezuelan officials discussed the possibility of easing oil sanctions on Venezuela but made scant progress toward a deal in their first high-level bilateral talks in years, five sources familiar with the matter said, as Washington seeks to separate Russia from one of its key allies.
Elsewhere in Iraq, the West Qurna 2 oilfield will resume operations today and production will increase gradually to reach its normal output of 400,000 bpd, two oil sources said. The oilfield was shut down temporarily for maintenance last month. – Reuters