LONDON: Oil prices on Monday rose to their lowest since 2008, amid fears over supply of oil by the United States and European allies considering sanctions on Russian oil imports and prospects of a rapid return of Iranian crude to global markets. reached the highest level.
Brent crude peaked at $139.13 a barrel in the first few minutes of trade and US West Texas Intermediate (WTI) settled at $130.50, both benchmarks hitting their highest level since July 2008.
By 1204 GMT, Brent was up 6.3% to $125.55 and WTI was back up 6.7% to $123.37.
Global oil prices have risen by more than 60% since the start of 2022, among other commodities, raising concerns about world economic growth and stagnation. China, the world’s No. 2 economy, is already targeting a slower growth rate of 5.5% this year.
US Secretary of State Antony Blinken said on Sunday that the United States and European allies are considering imposing sanctions on imports of Russian oil, while the White House is coordinating with congressional committees to move forward with the US sanctions.
“We consider $125 a barrel, our near-term forecast for Brent crude oil, as a soft cap for prices, although prices could move even higher,” said UBS commodity analyst Giovanni Stanovo. ”
He said Brent could go above $150 a barrel in a prolonged war.
Analysts at Bank of America said that if most of Russia’s oil exports are cut, there could be a reduction of 5 million barrels per day (bpd) or bigger, pushing prices up to $200.
Analysts at JPMorgan said oil could rise to $185 this year, and analysts at Mitsubishi UFJ Financial Group said oil could rise to as high as $180 and trigger a global recession.
Russia is the world’s top exporter of crude and oil products combined, with exports accounting for about 7 million bpd, or 7% of global supplies. Some volumes of Kazakhstan’s oil exports from Russian ports have also faced complications.
The head of Japan’s biggest trading lobby said the country’s imports of Russian crude could not be changed immediately. Russia is Japan’s fifth largest supplier of crude oil and liquefied natural gas (LNG).
Meanwhile, talks with world powers to revive Iran’s 2015 nuclear deal were mired in uncertainty after Russia sought US guarantees that Ukraine would not harm its trade with Tehran by facing sanctions over the conflict. Will happen. Sources said that China also raised new demands.
France on Monday asked Russia not to resort to blackmail over efforts to revive the nuclear deal, while Iran’s top security official said the outlook for talks is “not clear”.
Amrita Sen, co-founder of Iran, said, “Iran was the only real slowdown factor hanging in the market, but if the Iranian deal is delayed now, we could very quickly reach the bottom of the tank, especially If Russian barrels stay off the market for a long time.” Energy Aspects, a think tank.
Analysts said it would take several months for Iran to restore oil flows, even if it reaches a nuclear deal.
Separately, US and Venezuelan officials discussed the possibility of easing oil sanctions on Venezuela, but made little progress toward a deal in their first high-level bilateral talks in years, five sources familiar with the matter said. Said, as Washington seeks to separate Russia from the One. its main allies.
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