Since Russia launched a war on Ukraine last week, oil prices have risen over 20% on growing signs of supply disruptions upheld by the wide range of sanctions on Russia.
International benchmark Brent crude briefly touched at $119.78 before it fell back to $118.54 per barrel at 0828 GMT for a 4.96% gain after closing the previous session at $112.93 a barrel, recording its highest level since May 2012.
American benchmark West Texas Intermediate (WTI) traded at $115.34 per barrel at the same time for a 4.28% increase after the previous session closed at $110.60 a barrel, reaching the highest price since September 2008.
Brent was trading at around $98 a barrel on Feb. 24 when Russia announced a military operation in eastern Ukraine, and it has since risen by nearly 20% to $119.78 a barrel.
WTI recorded a weekly high gain of 25.6% since last week, hitting over $116.a barrel early on Thursday.
“The Russian oil producer, Surgutneftegas, failed for the third time to sell Urals crude via its regular tender. Oil trader, Trafigura, also tried to sell a cargo of the country’s main export grade, but failed,” said ANZ commodity strategist Daniel Hynes.
On Thursday, the White House announced a new round of sanctions that prohibit the export of specific refining technologies, making it more difficult for Russia to modernize its oil refineries.
Hynes said the White House ratcheted up pressure on Russia with the announcement that it will apply export controls targeting Russian oil refining.
“This raises concerns that Russian oil supplies will continue to hit constraints,” he said.
Prices started skyrocketing after OPEC+ oil producers agreed Wednesday in a 15-minute meeting to adhere to the current plan of increasing output by 400,000 barrels per day (bpd) through April, ignoring pressures and calls to make an increase.
The price surges came despite a coordinated move by the International Energy Agency (IEA) member countries in which they agreed to release 60 million barrels of oil from storage “to send a unified and strong message to global oil markets that there will be no shortfall in supplies as a result of Russia’s invasion of Ukraine.'
The US will support the move with 30 million barrels. However, many experts say the move has been met with indifference, with the market questioning the country’s ability to do so as it has still not completely delivered its 50 million barrels of emergency oil sales from November.
By Sibel Morrow