NEW YORK: Oil prices have increased over 6 per cent, touching their highest since 2008 on today following the US and European allies mulling a ban on Russian oil.
Besides, tight supply feared due to delay in the potential return of Iranian crude to global markets.
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Sources said that Brent crude futures jumped $8.46, or 7.2 per cent, to $126.57 a barrel by 0128 GMT. US West Texas Intermediate (WTI) crude increased $7.65, or 6.6 per cent, to $123.33, they added.
Today, during the first few minutes of trade, both benchmarks jumped over $10 a barrel to their highest since July, 2008 with WTI at $130.50 and Brent at $139.13.
Today’s intraday highs have been near record levels seen for both contracts in July 2008 when WTI reached $147.27 and Brent touched $147.50 a barrel.
The European and the US allies are mulling a ban on the imports of Russian oil, US Secretary of State Blinken said. The White House had coordinated with key Congressional committees to move forward with their own ban.
CMC Markets analysts are of the view that a boycott would put massive pressure on oil and gas supply, which has already felt the increasing demand impact.
“Oil prices are likely to increase in the short term, moving towards $150 a barrel not out of the question,” they added.
According to the analysts, the move to ban oil imports from Russia will put further pressure on global economies. As a result, inflation will go higher, leaving central banks debating how quickly rate hikes should be implemented.
International oil prices have jumped 65 per cent since the beginning of 2022, along with other commodities. This has raised concerns about stagflation and world economic growth.
This year, world’s No. 2 economy China is already targeting a slower growth of 5.5 per cent.
