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March 7, 2022updated 23 Mar 2022 12:07pm

Oil prices soar to nearly $130 per barrel as Ukraine crisis escalates

The price surpassed the top 2012 mark of over $128, as the US and its allies are considering banning oil imports from Russia.

Understand the impact of the Ukraine conflict from a cross-sector perspective with the Global Data Executive Briefing: Ukraine Conflict


Crude oil prices have reached their highest levels since 2008 as the US and its European allies are considering banning oil imports from Russia in the wake of Moscow’s invasion of Ukraine, reported Reuters.

The surge also was driven by deferments in Iran’s 2015 nuclear deal negotiations with world powers, and the potential return of the Middle Eastern country’s crude oil to the global market.

Brent increased by $11.67, or 9.9%, to reach $129.78 a barrel by 6:50pm EST (23:50 GMT) while US West Texas Intermediate (WTI) crude increased by $10.83, or 9.4%, to settle at $126.51, according to Reuters.

Talks to revive the 2015 nuclear deal between Iran and world powers were delayed, following demands by Russia for a US guarantee that the latter’s sanctions over the Ukraine conflict would not affect cooperation between Russia and Iran.

China has also demanded written guarantees from the US that its sanctions would not harm Chinese companies doing business in Iran.

In response to demands by Russia, the US Secretary of State Antony Blinken said the recently imposed sanctions by the US on Russia are unconnected with the potential nuclear deal with Iran.

US gasoline and distillate futures also reached record-high prices, after the market opened on 6 March 2022.

Think tank Energy Aspects co-founder Amrita Sen was cited by the news agency as saying: “Iran was the only real bearish factor hanging over the market, but if now the Iranian deal gets delayed, we could get to tank bottoms a lot quicker, especially if Russian barrels remain off the market for long.”

The surging oil prices are also supported by the closure of the El Feel and Sharara oilfields in Libya last week, as a result of the illicit closure of crude pumping valves.

The closure has resulted in the loss of 330,000 barrels per day, and a daily loss of more than $34.69m (LD160m), according to the National Oil Corporation (NOC).

Amid the Russia and Ukraine conflict, Italy is planning to increase energy cooperation with Qatar to reduce its reliance on Russian gas, reported Reuters.

Italy imports 90% of gas to meet its demands. Of this, approximately 40% is imported from Russia and 10% is from Qatar.

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