U.S. crude oil briefly tops $130 a barrel, a 13-year excessive on doable Western ban of Russian oil

U.S. crude oil surged greater than 7% in Sunday night commerce because the market continued to react to provide disruptions stemming from Russia’s ongoing invasion of Ukraine and the potential for a ban on Russian oil and pure fuel.

West Texas Intermediate crude futures, the U.S. oil benchmark, traded 7.34% greater to $124.17 per barrel. At one level the worth rose to $130.50 Sunday night, its highest since July 2008, earlier than retreating.

The worldwide benchmark, Brent crude, spiked 8.54% greater to $128.20. Brent hit a excessive of $139.13 at one level in a single day, additionally its highest since July 2008.

“Oil is rising on the prospect for a full embargo of Russian oil and merchandise,” mentioned John Kilduff of Once more Capital. “Already excessive gasoline costs are going to maintain going up in a jarring vogue. Costs in some states will likely be pushing $5 fairly rapidly.”

The U.S. and its allies are contemplating banning Russian oil and pure fuel imports, Secretary of State Antony Blinken mentioned in an interview with CNN’s “State of the Union” on Sunday.

“We are actually speaking to our European companions and allies to look in a coordinated manner on the prospect of banning the import of Russian oil whereas ensuring that there’s nonetheless an acceptable provide of oil on world markets,” he mentioned. “That is a really lively dialogue as we converse.”

In the meantime, Speaker Nancy Pelosi mentioned in a letter to Democratic colleagues on Sunday night that the U.S. Home of Representatives is “exploring sturdy laws” to ban the import of Russian oil — a transfer which might “additional isolate Russia from the worldwide financial system.”

“Our invoice would ban the import of Russian oil and power merchandise into the USA, repeal regular commerce relations with Russia and Belarus, and take step one to disclaim Russia entry to the World Commerce Group.  We’d additionally empower the Govt department to lift tariffs on Russian imports,” she wrote.

Whereas Western sanctions in opposition to Russia have up to now allowed the nation’s power commerce to proceed, most consumers are avoiding Russian merchandise already. Sixty-six % of Russian oil is struggling to seek out consumers, in line with JPMorgan evaluation.

The U.S. common for a gallon of fuel topped $4 on Sunday, in line with AAA, in a speedy transfer as a result of battle. The underlying price of oil accounts for greater than 50% of the price of fuel that customers put of their automobiles.

—With reporting by Pippa Stevens, Samantha Subin and Patti Domm.