Oil Hits 14-Year High on Talk of Russian Oil Embargo

Oil prices jumped on Monday to their highest levels since 2008 as the United States and its European allies considered banning crude imports from Russia, while a quick return of Iranian crude to global markets looked less likely.

Brent crude futures ended the trading session up $5.1, or 4.3 percent, to settle at $123.21 a barrel, while US West Texas Intermediate crude contracts closed $3.72, or 3.2 percent, at $119.40 a barrel.

During the session, both benchmarks hit their highest levels since July 2008, with Brent reaching $139.13 a barrel and US crude reaching $130.50.

International oil prices have jumped about 60 percent since the beginning of 2022, with growing concern about global economic growth and fears of stagflation. China, the world’s second-largest economy, is targeting slower growth of 5.5 percent this year.

On Sunday, US Secretary of State Anthony Blinken said the United States and its European allies were discussing the possibility of banning imports of Russian oil. On Monday, the White House said President Joe Biden had not made a decision on a ban on oil imports from Russia.

Russian Deputy Prime Minister Alexander Novak said today that oil prices may jump above $300 a barrel if the United States and the European Union ban Russian oil imports.

Analysts say a prolonged war in Ukraine could push Brent prices above $150 a barrel.

Analysts at Bank of America said that if Russian oil exports were cut off, there could be a shortfall of five million barrels per day or more, pushing prices up to $200.

Meanwhile, efforts to revive Iran’s 2015 nuclear deal with world powers have been cast into doubt after Russia demanded a US guarantee that the sanctions it faces over the Ukraine war will not harm its trade with Tehran. Sources said China has also raised new demands.

Analysts said it would take a few months for Iran to restore oil flows even if it reached a nuclear deal.