Ongoing hostilities between Russia and Ukraine, as well as the lack of fresh supplies, have pushed crude oil prices to a 14-year high of $130 per barrel on Monday.
The crisis as well as fears of lower supplies along with robust global demand pushed the Brent-indexed crude oil price higher.
Lately, crude oil prices have surged by nearly 20 per cent in the last three days on fear of tight supplies.
On Friday, the Brent-indexed crude oil stood at $113.76 per barrel from a 10-year high of $119.84 per barrel a day before.
The crude prices have consistently increased last week.
At present, Russia is the third-largest producer of crude oil in the world.
It is feared that new and more stringent sanctions against Russia will curtail global supplies and stifle global growth.
Since then a lot has happened on the global crude oil price front. Since early November, benchmark Brent crude oil prices have risen by over 70 percent.
Oil prices continued to surge trade as the market reacted to supply disruptions stemming from Russia’s ongoing invasion of Ukraine and the possibility of a ban on Russian oil and natural gas.
West Texas Intermediate crude futures, the U.S. oil benchmark, spiked 6.6% to trade at $123.36 per barrel. At one point the price rose to $130.50 Sunday evening, its highest since July 2008, before retreating.
The international benchmark, Brent crude, advanced 6.3% to $125.60 per barrel. Brent hit a high of $139.13 at one point overnight, also its highest since July 2008.
“Oil is rising on the prospect for a full embargo of Russian oil and products,” said John Kilduff of Again Capital. “Already high gasoline prices are going to keep going up in a jarring fashion. Prices in some states will be pushing $5 pretty quickly.”
The U.S. and its allies are considering banning Russian oil and natural gas imports, Secretary of State Antony Blinken said in an interview with CNN’s “State of the Union” on Sunday.
Meanwhile, Speaker Nancy Pelosi said in a letter to Democratic colleagues on Sunday evening that the U.S. House of Representatives is “exploring strong legislation” to ban the import of Russian oil — a move which would “further isolate Russia from the global economy.”
While Western sanctions against Russia have so far allowed the country’s energy trade to continue, most buyers are avoiding Russian products already. Sixty-six percent of Russian oil is struggling to find buyers, according to JPMorgan analysis.
The U.S. average for a gallon of gas topped $4 on Sunday, according to AAA, in a rapid movement due to the conflict. The underlying cost of oil accounts for more than 50% of the cost of gas that consumers put in their cars.
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