The prices of the two reference barrels for oil in the world soared this Tuesday to be clearly above 100 dollars, when the sanctions for the invasion of Ukraine already affect Russian exports of black gold.
The North Sea Brent barrel reached during the session 107.57 dollars per barrel in Londonfor the first time since July 2014, while US West Texas Intermediate (WTI) rose to $106.78, the highest since June 2014.
Nothing could stop the race of crude oil towards the cloudsNot even the announcement by the International Energy Agency that released 60 million barrels of its member countries’ reserves to the market to try to stabilize prices.
The decision, adopted by some thirty IEA countries, sought to “send a clear signal to the world oil markets that there will not be a shortage of supply due to the Russian invasion of Ukraine,” the entity, which represents the interests of the world’s major energy consumers.
According to the US Energy Information Agency (EIA), some 97 barrels per day of crude oil and petroleum products were consumed daily in the world in 2021.
Thus, the barrel of Brent for delivery in May finally closed up 7.14% at 104.97 dollars, while the barrel of WTI (approximately 159 liters) for delivery in April was 103.41 dollarsin advance of 8.03% after gaining more than 11% during the day.
“As the situation escalates in Ukraine, prices will continue to rise, because it increases the likelihood that Russian exports will be sanctioned and inaccessible to the market,” said John Kilduff of Again Capital.
Russia is the second largest oil exporter in the world and accounts for 40% of the European Union’s annual natural gas imports.
“Direct sanctions on Russia’s oil and gas exports is a matter of timing and not probability,” said Markets.com analyst Neil Wilson.
Isolate Moscow
According to many traders, Russian crude exports are already under pressure.
“Some of the operators I deal with they try to sell (Russian oil) at deeply discounted pricesbut no one wants it,” explained John Kilduff.
“The business world builds a fortress to isolate Russia from the international community,” said Susannah Streeter, an analyst at Hargreaves Lansdown. Companies around the world respond to Russia “freezing transactions with Moscow and abandoning investments worth billions,” he added.
The Anglo-Dutch hydrocarbons giant Shell announced on Monday that it is separating itself from its participation in several joint projects with the Russian group Gazprom in Russia due to the Russian invasion in Ukraine.
Previously, BP had done the same with the Russian giant Rosneft.
France’s TotalEnergies announced on Tuesday that it “will not contribute more capital to new projects in Russia.”
The French carrier CMA CGM announced the suspension of new orders from and destined for Russian ports, following its main competitors Maersk and MSC.
That could create “a disruption to shipments from Russia with cargo booking cancellations,” and consequently cause energy prices to rise “in the short term, without Russia turning off the tap,” Streeter said.
Western countries also excluded large banks Russians from the Swift interbank platform.
A considerable proportion of oil transportation by sea is financed on credit.
Moscow is preparing a decree to try to stop the bleeding of foreign investments that began since the announcement of sanctions against it.
“Fears that Russia will respond by using its energy exports as a weapon keeps oil and gas prices highStreeter added.
The prices of the two reference barrels for oil in the world soared this Tuesday to be clearly above 100 dollars, when the sanctions for the invasion of Ukraine already affect Russian exports of black gold.
The North Sea Brent barrel reached during the session 107.57 dollars per barrel in Londonfor the first time since July 2014, while US West Texas Intermediate (WTI) rose to $106.78, the highest since June 2014.
Nothing could stop the race of crude oil towards the cloudsNot even the announcement by the International Energy Agency that released 60 million barrels of its member countries’ reserves to the market to try to stabilize prices.
The decision, adopted by some thirty IEA countries, sought to “send a clear signal to the world oil markets that there will not be a shortage of supply due to the Russian invasion of Ukraine,” the entity, which represents the interests of the world’s major energy consumers.
According to the US Energy Information Agency (EIA), some 97 barrels per day of crude oil and petroleum products were consumed daily in the world in 2021.
Thus, the barrel of Brent for delivery in May finally closed up 7.14% at 104.97 dollars, while the barrel of WTI (approximately 159 liters) for delivery in April was 103.41 dollarsin advance of 8.03% after gaining more than 11% during the day.
“As the situation escalates in Ukraine, prices will continue to rise, because it increases the likelihood that Russian exports will be sanctioned and inaccessible to the market,” said John Kilduff of Again Capital.
Russia is the second largest oil exporter in the world and accounts for 40% of the European Union’s annual natural gas imports.
“Direct sanctions on Russia’s oil and gas exports is a matter of timing and not probability,” said Markets.com analyst Neil Wilson.
Isolate Moscow
According to many traders, Russian crude exports are already under pressure.
“Some of the operators I deal with they try to sell (Russian oil) at deeply discounted pricesbut no one wants it,” explained John Kilduff.
“The business world builds a fortress to isolate Russia from the international community,” said Susannah Streeter, an analyst at Hargreaves Lansdown. Companies around the world respond to Russia “freezing transactions with Moscow and abandoning investments worth billions,” he added.
The Anglo-Dutch hydrocarbons giant Shell announced on Monday that it is separating itself from its participation in several joint projects with the Russian group Gazprom in Russia due to the Russian invasion in Ukraine.
Previously, BP had done the same with the Russian giant Rosneft.
France’s TotalEnergies announced on Tuesday that it “will not contribute more capital to new projects in Russia.”
The French carrier CMA CGM announced the suspension of new orders from and destined for Russian ports, following its main competitors Maersk and MSC.
That could create “a disruption to shipments from Russia with cargo booking cancellations,” and consequently cause energy prices to rise “in the short term, without Russia turning off the tap,” Streeter said.
Western countries also excluded large banks Russians from the Swift interbank platform.
A considerable proportion of oil transportation by sea is financed on credit.
Moscow is preparing a decree to try to stop the bleeding of foreign investments that began since the announcement of sanctions against it.
“Fears that Russia will respond by using its energy exports as a weapon keeps oil and gas prices highStreeter added.
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