$300/barrel, “catastrophic consequences” if Russian oil is banned: Moscow
Oil prices rose on Tuesday even as peace talks in Ukraine made little progress, torn between the prospect of a ban on Russian oil imports and warnings that Russian crude prices could rise to $300/ bin.
After Russia and Ukraine’s third attempt at talks in Belarus, a Ukrainian negotiator said that although there was little progress in agreeing on the logistics for the evacuation of civilians, everything on the basis of version remains unchanged.
Benchmark Brent crude, which briefly hit more than $139 a barrel in the previous session, spiked in Tuesday morning trading and was up nearly 1% at $124 a barrel.
US crude rose about 0.4% to $119.86 a barrel. At the same time, prices of other commodities, including nickel, rose as industrial buyers and traders jostled each other over the Russian-Ukrainian conflict showing no signs of abating.
Crude oil prices jumped to their highest levels since 2008 on Monday after US Secretary of State Antony Blinken said Washington and its European allies were considering banning oil imports from Russia in response to the Ukraine invasion.
A Reuters report suggests that Western countries could face oil prices above $300 a barrel and possible closure of the main Russia-Germany gas pipeline if governments continue to threaten supply cuts. energy supplies from Russia, according to a senior minister on Monday.
“It is clear that the rejection of Russian oil will lead to catastrophic consequences for the global market,” Russian Deputy Prime Minister Alexander Novak said in a statement on state television.
“The price increase will be unpredictable. If not $300 a barrel would be $300 a barrel.”
Novak said it would take Europe more than a year to replace the oil it gets from Russia, and it would cost them significantly more.
The recovery in oil and other commodity prices will only intensify the global inflationary conflict.
“Global risk sentiment started the week deeply negative, before improving as European leaders said they would fight sanctions on Russia’s energy exports, instead prioritizing an uncompromising strategy to reduce dependence on Russian imports,” ANZ analysts said in a note.
“However, the market is volatile and very sensitive to a change in tone. The gradually rising breakeven inflation rate is evidence that inflation concerns are increasing as commodity prices remain firmly underpinned. sure,” they added.
