The price of Oman crude shot up to $125.16 per barrel after gaining an unprecedented $16.29 a barrel overnight on Monday as international benchmarks scaled peaks last seen in 2008.
The spikes were driven by fears of an impending ban by Western powers on Russian crude exports, coupled with concerns about delays in the early return of Iranian oil to the market.
According to Reuters, Brent crude reached $139.13 a barrel and US West Texas Intermediate (WTI) hit $130.50, both benchmarks striking their highest since July 2008. By 1204 GMT, prices had eased back, with Brent up 6.3 per cent at $125.55 per and WTI up 6.7 per cent at $123.37.
Global oil prices have spiked more than 60 per cent since the start of 2022, along with other commodities, raising concerns about world economic growth and stagflation. China, the world’s No 2 economy, is already targeting slower growth of 5.5 per cent this year.
US Secretary of State Antony Blinken said on Sunday said the United States and European allies were exploring banning imports of Russian oil, while the White House was coordinating with Congressional committees to move forward with a US ban. A prolonged war could see Brent moving above the $150 per barrel mark, he said.
Analysts at Bank of America said if most of Russia’s oil exports were cut off, there could be a 5 million barrel per day (bpd) or larger shortfall, pushing prices as high as $200.
JP Morgan analysts said oil could soar to $185 this year, and analysts at Mitsubishi UFJ Financial Group Inc (MUFG) said oil may rise to $180 and cause a global recession.
Russia is the world’s top exporter of crude and oil products combined, with exports at around 7 million bpd, or 7 per cent of global supply. Some volumes of Kazakhstan’s oil exports from Russian ports have also faced complications.
Meanwhile, talks to revive Iran’s 2015 nuclear deal with world powers were mired in uncertainty after Russia demanded a US guarantee that sanctions it faces over the Ukraine conflict would not hurt its trade with Tehran. China also raised new demands, sources said.
