Mar 7, 2022 - Economy

Oil prices shoot to 14-year highs amid talk of Russian import ban

Data: FactSet; Chart: Axios Visuals

Oil prices shot to 14-year highs as the U.S. and other nations weigh direct bans or limits on crude oil imports from Russia.

Why it matters: The latest price surge shows how Russia's invasion of Ukraine and the response to it is rattling what are already tight energy markets.

  • Soaring energy prices are the most direct channel through which the world economy stands to be battered by the conflict. But rising prices for other commodities will also fuel inflation and could disrupt supply lines, Axios' Neil Irwin reports.

Catch up fast: Brent crude oil surged to nearly $140-per-barrel after markets opened Sunday night before easing off to near $123 Monday morning. WTI, the U.S. benchmark, was trading near $120.

  • Russian oil supplies have already been crimped, even as sanctions have avoided direct aim at the Kremlin-backed energy sector, due to "self-sanctioning" and Russian isolation from commercial transactions.
  • Before the invasion, Russia exported around 5 million barrels per day of crude oil and condensates to world markets and additional volumes of petroleum products. Europe is the largest buyer.

What we're watching: Fresh signs of U.S. and other nations' intentions.

  • U.S. Secretary of State Antony Blinken said Sunday the U.S. is working with its European allies to look into the possibility of banning Russian oil imports.
  • But what's next is anyone's guess. "With the surge in geopolitical tensions, uncertainty and anxiety, it would be quite difficult to accurately gauge the top of this rally," John Driscoll, founder of JTD Energy Services, tells Bloomberg.

The intrigue: Axios' Hans Nichols reports President Biden’s advisers are discussing a possible visit to Saudi Arabia this spring to help repair relations and convince the kingdom to pump more oil.

  • Saudi Arabia has significant spare production capacity, but OPEC+ has thus far been unwilling to deviate from modest monthly output increases.

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