Oil Rises as Supply Concerns Rise After Sanctions Against Russia

Oil prices rose on Wednesday as fears of supply disruptions mounted in the wake of massive sanctions on Russia’s banks as fighting intensified in Ukraine, while traders scrambled to search for alternative oil sources in an already tight market.

Brent crude futures rose more than $8 to touch a peak of $113.02 a barrel, the highest since June 2014, before tumbling $6.20, or 5.9 percent, to $111.17 a barrel.

US West Texas Intermediate crude futures also jumped more than $8 a barrel, reaching the highest level since August 2013, before losing some momentum and trading up $5.86, or 5.7 percent, to $109.27 a barrel.

Russian oil exports account for about eight percent of global supplies.

ExxonMobil said on Tuesday it would exit Russian oil and gas operations due to its invasion of Ukraine. The decision would see Exxon withdraw from managing large oil and gas production facilities on Sakhalin Island in Russia’s the Far East.

The agreement of member countries of the International Energy Organization on Tuesday to pump 60 million barrels of oil from stockpiles failed to reassure the market, and prices increased after the announcement.

Meanwhile, the Organization of the Petroleum Exporting Countries (OPEC) and its allies, including Russia, OPEC+, are scheduled to meet later on Wednesday, when they are expected to stick to plans to increase production by 400,000 barrels per day on a monthly basis.