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Oil prices rose on Tuesday as concerns about potential supply disruptions after the Russian invasion of Ukraine and associated sanctions overshadowed talk of a coordinated global drawdown of crude stocks to calm markets.
Brent crude futures rose $3.04, or 3.1 percent, to $101.01. The benchmark touched a seven-year high of $105.79 after the start of the Russian invasion of Ukraine last week.
US West Texas Intermediate crude futures for April delivery rose $2.56, or 2.67 percent, to $98.28. And US crude contracts had touched a high level of $99.10 a barrel the previous day, and recorded, upon settlement, an increase of more than 4 percent.
A large Russian military convoy approached Kyiv on Tuesday after ceasefire talks between Russia and Ukraine ended without a breakthrough.
Russia’s isolation worsened with the world’s largest shipping company, Maersk, announcing on Tuesday that it would halt container shipping to and from Russia.
Major oil and gas companies, such as BP and Shell, have announced plans to exit Russian operations and joint ventures.
Buyers of Russian oil are struggling with payments and the availability of ships with sanctions in place.
However, market sentiment was supported by the US and its allies’ search for a coordinated withdrawal of crude stocks to ease supply disruptions. And the media reported that this withdrawal may reach between 60 and 70 million barrels.
The International Energy Agency is preparing to hold an extraordinary ministerial meeting on Tuesday to discuss the role its members can play in stabilizing oil markets.
Russia, which describes its actions in Ukraine as a “special operation”, exports between four and five million barrels per day of crude oil and between two and three million barrels per day of refined products.
The Organization of the Petroleum Exporting Countries (OPEC) and other producers, including Russia, will also meet on Wednesday when they are expected to maintain a planned gradual increase in supplies during April.
