Oil prices rise after supply stops via Russian pipeline

Oil prices rose by more than $1 on Tuesday, after falling earlier, after Russia said that oil exports to Europe through the southern part of the Druzhba pipeline had been suspended since early August, reviving concerns about a supply shortage.

Russia’s pipeline monopoly Transneft said Ukraine had suspended the flow of oil through the pipeline because Western sanctions had prevented Moscow from paying transit fees.

Brent crude rose $1.42, or 1.5 percent, to $98.07 a barrel at 1113 GMT, after falling earlier to $94.90. US West Texas Intermediate crude also rose $1.01, or 1.1 percent, to $91.77.

This development related to Druzhba’s pipeline comes at a time when supply concerns have been waning amid growing concern about a recession. Earlier, oil came under pressure in connection with talks to revive the Iran nuclear deal that would allow for an increase in Iranian oil exports.

Oil prices rose earlier in the year after Russia’s invasion of Ukraine heightened supply concerns, sending Brent crude to $139 in March, close to an all-time high.