US oil prices surged Sunday night, pushing prices above $125 a barrel in electronic trading as discussions about a ban on Russian oil flared up.
Secretary of State Anthony Blinken said Sunday the US is considering imposing an embargo on Russian oil imports “in coordination” with European and NATO allies in response to Moscow’s unprovoked invasion of Ukraine.
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U.S. e-traded CL00, +7.24%, rose $10.76, or about 9.3%, to $126.34 a barrel late Sunday after West Texas Intermediate CLJ22, +7 April futures 24% CL.1, +7.24% on the New York Mercantile Exchange. marked the highest weekly increase on record, a 26.3% increase based on data going back to 1983. At its peak on Sunday, oil reached an intra-session high of $130.50 before pulling back, according to FactSet.
International benchmark Brent BRN00, +8.40%, up $10.67, or 9.1%, at $128.83 a barrel, after a 25.5% weekly gain in May Brent BRNK22, +8.40% , which is also the strongest such weekly percentage increase on record. according to records dated January 1991. Brent hit a Sunday high of $139.13.
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Speaking about CNN’s “State of the Union,” Blinken said the White House is considering a ban on Russian oil imports in coordination with European allies in an attempt to mitigate the impact of any such ban on global supplies, which could already lead to…high prices even higher.
Also read: U.S. stock futures fall on Sunday as the U.S. and its allies consider a ban on Russian oil imports
“We saw the ruble in free fall. We see the economy heading into a deep recession. We have already had a major impact, but again, as we speak, we are considering this prospect of banning oil imports in coordination with allies and partners,” he told NBC News.
Russia is one of the largest producers of crude oil, and the sanctions imposed on its oil are seen as holding back the possibility of market surges.
However, there is already an unspoken ban on Russian oil, and potential buyers are avoiding exporting oil from Russia.
Helima Croft, head of global commodities strategy at RBC Capital Markets, said in a report Thursday that Russian oil is facing a virtual embargo as the US and its allies imposed tough sanctions on major Russian banks, blocking their access to the all-important interbank SWIFT. Messaging service about Moscow’s invasion of Ukraine on 24 February. The sanctions have avoided harsh sanctions amid the rising inflation that the US and much of the world are facing, but the momentum around the energy ban is building as Western countries seek to rein in the Kremlin’s military campaign. in Ukraine and inflict financial damage on it.
Croft said Russia’s “already staggering” export losses could be between 3 million and 4 million barrels a day if Western powers get their way and impose a sort of energy-focused “secondary sanctions” that have been directed at Iran.
More: Why Russian Oil Can’t Find Buyers Even When Oil Soars Above $100 Per Barrel
Meanwhile, Bloomberg reported on Sunday that Saudi Arabia has raised prices for all regions, increasing its Arab Light crude for next month’s shipments to Asia to $4.95 a barrel above its benchmark.
Doubts over reaching a nuclear disarmament deal between Iran and world powers also fueled oil prices, Reuters reported, with growing doubts that such a deal, which could see Tehran send new supplies to the market, could be reached in the near future.