U.S. crude oil rose more than 7 percent in Sunday night trade, as the market continued its reaction to supply disruptions resulting from Russia’s ongoing invasion Ukraine and the possibility that Russia will ban oil and natural gas.
West Texas Intermediate crude oil futures traded 7.34 percent higher at $124.17 per bar, the U.S. benchmark. The price rose to $130.50 at one point on Sunday evening. This was its highest level since July 2008. It then fell.
The international benchmark Brent crude jumped 8.54 percent to $128.20. Brent reached a record $139.13 overnight, which is also the highest Brent has seen since July 2008.
John Kilduff, of Again Capital, stated that oil prices are rising due to the possibility of a complete embargo on Russian oil and other products. “The already-stretchedly high gasoline prices will continue to rise in a shocking fashion.” Some states will see prices as high as $5 in no time.
In an interview on Sunday with CNN’s “State of the Union”, Secretary of State Antony Blinken stated that the U.S. and its allies were considering banning Russian oil imports.
He said that he was now in contact with European allies and partners to discuss the possibility of banning Russian oil imports while ensuring there is an adequate supply of oil on the world markets. “That’s an active discussion as we speak.”
In a letter to her Democratic colleagues, Nancy Pelosi stated that the U.S. House of Representatives was “exploring strong legislation to ban the import of Russian crude oil” — a move that would “further isolate Russia’s economy.”
“Our bill would prohibit the import of Russian oil products and energy products into America, abolish normal trade relations between Russia and Belarus, take the first step towards denying Russia access to the World Trade Organization. She also wrote that the Executive would be empowered to increase tariffs on Russian imports.
Although Western sanctions have allowed Russia’s energy trade to continue as it is, many buyers are already avoiding Russian products. JPMorgan analysis shows that 66% of Russian oil is not finding buyers.
According to AAA, the U.S. average price for a gallon of gasoline was $4 on Sunday. This is due to the war in Iraq. More than 50% of the price of gasoline consumers use to fill their cars with is due to the underlying cost oil.
