The price of oil soared amid negotiations to ban oil in Russia and postpone the deal with Iran

  • Brent and WTI jump to highest since 2008
  • US and Europe discuss ban on Russian oil imports
  • Iranian nuclear talks overshadowed by Russian demands
  • US and Venezuela discuss oil sanctions

LONDON, March 7 – Oil prices rose to their highest level since 2008 on Monday amid supply-side concerns as the US and European allies consider a ban on Russian oil imports and the prospect of a quick return of Iranian oil to global markets have deteriorated.

Brent reached $139.13 a barrel and U.S. West Texas Intermediate (WTI) reached $130.50 in early trading, both benchmarks reaching their highest since July 2008 before cutting gains.

By 1437 GMT, Brent was up $3.54, or 3%, to $121.65 a barrel, while WTI was up $1.93, or 1.7%, to $117.61.

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Global oil prices have risen more than 60% since the start of 2022, along with other commodities, raising concerns about global growth and stagflation. China, the world’s No. 2 economy, is already targeting slower growth of 5.5% this year. More

US Secretary of State Anthony Blinken said Sunday that the United States and European allies are looking into a ban on Russian oil imports while the White House is coordinating with congressional committees to advance the US ban. More

“We view $125 a barrel, our short-term forecast for Brent crude, as a soft cap on prices, although prices could rise even higher if the disruption worsens or continues for a longer period,” said UBS commodities analyst Giovanni Staunovo.

A protracted war could push Brent past $150 a barrel, he said.

Analysts at Bank of America said that if most Russian oil exports are cut off, there could be a shortage of 5 million barrels per day or more, pushing prices up to $200.

Models of oil drums and a pump jack are displayed in front of a stock chart and “$100” in this illustration taken February 24, 2022. REUTERS/Dado Ruvic/Illustration

Analysts at JP Morgan say oil could soar to $185 this year, while analysts at Mitsubishi UFJ Financial Group Inc (MUFG) say oil could rise to $180 and trigger a global recession.

Russia is the world’s largest exporter of oil and petroleum products combined, exporting about 7 million barrels per day, or 7% of world supplies. Some volumes of Kazakh oil exports from Russian ports also faced complications.

The head of Japan’s largest business lobby said that Russian oil imports into the country could not be replaced immediately. Russia is the fifth largest supplier of crude oil and liquefied natural gas (LNG) to Japan.

Meanwhile, talks to restart Iran’s 2015 nuclear deal with world powers stalled after Russia demanded U.S. assurances that the sanctions it faced over the conflict in Ukraine would not harm its trade with Tehran. China has also made new demands, the sources said. More

On Monday, France urged Russia not to resort to blackmail over attempts to revive the nuclear deal, while a senior Iranian security official said the prospects for talks “remain unclear.” More

“Iran was the only real bearish factor looming over the market, but if the Iranian deal is now delayed, we could get to the bottom of the reservoirs much faster, especially if Russian barrels stay out of the market for a long time,” said Amrita Sen, co-founder of Energy Aspects, analyst Centre.

Analysts say it will take Iran several months to restore oil flows, even if it strikes a nuclear deal. More

U.S. and Venezuelan officials separately discussed the possibility of easing oil sanctions against Venezuela, but made little progress towards an agreement in their first high-level bilateral talks in years, five people familiar with the matter said, as Washington seeks to separate Russia from one of the his key allies. More

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Reporting by Bozorgmer Sharafedin in London and Scott DiSavino in New York; additional reporting by Florence Tan in Singapore; Edited by Jason Neely, Edmund Blair and Emilia Sithole-Matharis.

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