Oil prices hit record highs for the first time in years amid tight supply

London — Thursday’s Benchmark Brent Crude oil prices rose to nearly $ 120 a barrel, and Russia’s oil exports were confused as traders tried to avoid getting caught up in sanctions.

US crude oil reserves were also supported by the lowest prices in years, with Brent crude oil futures rising to $ 119.84 a barrel, the highest level since 2012.

By 1024 GMT, contracts were $ 115.11 a barrel, up $ 2.18 (1.9%).

Brent has skyrocketed about 37% in the last 30 days, with a six-month spread on Thursday hitting a record high of over $ 21 a barrel, indicating a very tight supply.

US West Texas Intermediate Crude Oil hit a high of $ 116.57, the highest since 2008, and then retreated slightly to $ 113.12, up to $ 2.52 or 2.3 percent.

This benefit follows new US sanctions on Russia’s oil refining sector, raising concerns that Russia’s oil and gas exports may be the next target.

Russia is competing with Saudi Arabia for the title of the largest exporter of crude and refined oil products, with more than 7 million barrels (bpd) shipped per day, about half of which is destined for Europe.

Washington is exercising economic sanctions to prevent Russia from invading Ukraine, but so far it has stopped targeting Russia’s oil and gas exports, and the global oil market and the U.S. We are comparing the impact on energy prices.

“Russia’s oil exports are expected to plummet by 1 million barrels / day due to sanctions and the indirect effects of voluntary action by businesses,” said Jarand Rystad, CEO of Rystad Energy.

“Oil prices can continue to rise and can exceed $ 130 per barrel.”

Australia’s ANZ has raised its short-term oil target to $ 125 a barrel.

The Organization of Petroleum Exporting Countries (OPEC) and allies, including Russia (collectively OPEC +), have decided to maintain an increase in production of 400,000 barrels per day in March despite soaring prices. ..

“Some people are sticking to the idea that the Iran deal will provide the very necessary relief (from rising oil prices), but the deal has not yet taken place and the amount needed is Russia’s major turmoil. I warn again that it’s too small to backfill, RBC Capital analyst Helima Croft said in a note.

The head of the International Atomic Energy Agency (IAEA) will visit Tehran on Saturday, Iran’s news agency Nournews reports, which may help pave the way for the revival of the 2015 nuclear agreement with Iran’s great powers. Suggested.

Meanwhile, US oil inventories continued to decline. Oklahoma’s major Cushing crude oil hub tanks were the lowest since 2018, while US strategic stockpiles were the lowest in nearly 20 years.

By Shadia Nasralla