Oil prices hit multi-year highs on Friday after Russia intensified its offensive in Ukraine. Oil prices have skyrocketed as oil purchases from the world’s second-largest exporter of crude have stopped. Crude prices had their biggest weekly rally in mid-2020. During this period, the Brent benchmark was up 16 per cent and US crude by 21 per cent. The most traded oil futures closed at their highest levels since 2013 and 2008 respectively.
Oil surged throughout the week as the US and its allies increased sanctions on Russia. On the other hand, the supply crisis is expected to worsen in the coming months due to halt in sales of Russian oil and gas.
Brent futures rose $7.65, or 6.9 percent, to $118.11 a barrel, while US West Texas Intermediate (WTI) crude closed $8.01 or 7.4 percent higher at $115.68.
This was the highest closing level for Brent since February 2013 and for WTI since September 2008. During the week, Brent reached its highest intraday level since May 2012 and WTI its highest level since September 2008.
Ukraine war on rising jobs in America, Wall Street closed with decline
Explain that Russia exports 4 to 5 million barrels of oil per day. This makes it the second largest crude oil exporter in the world. Russia is only behind Saudi Arabia in the export of crude oil. Traders were facing difficulties selling Russian oil throughout the week. On Friday, Shell PLC was the only notable buyer of the Russian cargo, which was sold for physical Brent crude at a steep discount of $28.
The oil crisis is likely to continue. Under pressure from lawmakers from both major parties, the Biden administration said it was looking at options to cut US imports of Russian oil. While it tries to minimize the impact on global supply and consumers.
Most Americans support the idea of banning Russian oil imports. According to a Reuters/Ipsos poll on Friday, 80 percent of them said the US should stop buying Russian oil.
Canada banned imports of Russian oil earlier this week. Russia’s biggest buyers include China, South Korea, Germany and the Netherlands. Some refiners have stopped buying Russian oil. Also trading firms want to avoid transacting with Russian sellers for fear of more sanctions.
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