Oil Rises To $130 As Russian Oil Struggles To Find Buyers

A worker walks past a pumping station at an oil field owned by Bashneft, near the village of Nikolo-Berezovka, northwest of Ufa, Bashkortostan, Russia, January 28, 2015. REUTERS/Sergey Karpukhin

The US imposes a ban on the import of Russian oil, the UK is gradually abandoning it
Iran’s chief nuclear negotiator returns to Vienna
U.S. Inventory Report Shows Growing Crude Oil Inventories

LONDON, March 9 – Oil rose to $130 a barrel on Wednesday amid fears of a potential supply shock as the United States banned Russian oil imports and signs that some buyers are already holding back.

The United States on Tuesday imposed a ban on Russian oil imports, Britain said it would phase it out, and Shell said it would stop buying Russian oil.

JP Morgan estimates that around 70% of Russian offshore oil is struggling to find buyers. More

“It is clear that the current crisis will not be resolved in the foreseeable future and hence oil prices are expected to remain elevated,” said Tamas Varga of oil broker PVM.

Brent crude rose $1.68, or 1.3%, to $129.66 a barrel at 0905 GMT. US West Texas Intermediate (WTI) rose $1.60, or 1.3%, to $125.30.

Oil rose after Russia, the world’s second largest oil exporter, launched a so-called “special operation” in Ukraine. On Monday, the price of Brent crude hit $139, the highest since 2008.

One potential source of additional oil supplies is Iran, which has been negotiating for several months with Western powers to restore an agreement that would lift sanctions against Iran in exchange for curtailing its nuclear program.

But negotiations were complicated by a last-minute demand from Russia. Iran’s chief negotiator for the talks in Vienna returned to the Austrian capital on Wednesday. More

Amid concerns about a lack of supply, there are signs that the market is still short of oil.

U.S. crude inventories rose 2.8 million barrels, according to market sources citing industry group data from the American Petroleum Institute on Tuesday. Official US stock data is due at 1530 GMT. [EIA/S]

Additional report by Yuki Obayashi and Mohi Narayan; editing by Jason Neely

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