October 2, 2022

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US crude oil jumps to $125 a barrel, the highest in 13 years due to a possible Western ban on Russian oil

US crude oil jumps to $125 a barrel, the highest in 13 years due to a possible Western ban on Russian oil

An oil and gas terminal at the port of Odessa in Odessa, Ukraine, on Saturday, January 22, 2022.

Christopher Akikkon | Bloomberg | Getty Images

US crude oil rose more than 8% in early trading Sunday evening as the market continued to respond to supply disruptions stemming from the ongoing Russian invasion of Ukraine and a possible embargo on Russian oil and natural gas.

West Texas Intermediate crude futures contractsThe US oil benchmark rose 8% to above $125 a barrel, the highest level since mid-2008. At one point, the price crossed $130 a barrel.

international standard, Brent crudeIt traded 9% higher at $128.60, also the highest price since 2008.

“Oil is rising with the expectation of a complete ban on Russian oil and products,” said John Kilduff of Again Capital. “Gasoline prices that are already high will continue to rise in a paradoxical manner. Prices in some states will push $5 very quickly.”

The United States and its allies are considering banning imports of Russian oil and natural gas, Secretary of State Anthony Blinken He said in an interview with “State of the Union” on CNN on Sunday.

“We are now talking with our European partners and allies to consider in a coordinated manner the possibility of banning the import of Russian oil while making sure that there is still adequate supply of oil in global markets,” he said. “This is a very active discussion as we speak.”

While Western sanctions against Russia have so far allowed the country’s energy trade to continue, most buyers are already avoiding Russian products. Sixty-six percent of Russian oil is struggling to find buyers, according to a JPMorgan analysis.

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American average gallon of gas I topped 4 bucks on SundayAccording to AAA, in a quick move due to the conflict. The base cost of oil is more than 50% of the cost of the gas consumers put in their cars.

– Prepared by Peppa Stevens, Samantha Sopin and Patti Doom.