Oil prices continue to surge as the market reacts to supply disruptions stemming from Russia’s ongoing invasion of Ukraine and the possibility of a ban on Russian oil and natural gas exports.
West Texas Intermediate (WTI) crude futures, the U.S. oil benchmark, spiked nearly 9% higher to $126.05 U.S. per barrel. At one point the price rose to $130.50 U.S., its highest level since 2008, before retreating.
The international benchmark, Brent crude oil, soared 10% higher to $129.75 U.S. Brent crude hit a high of $139.13 U.S. at one point, also its highest level since 2008.
The U.S. and its allies are considering banning Russian oil and natural gas imports, Secretary of State Antony Blinken said in a media interview over the weekend.
“We are now talking to our European partners and allies to look in a coordinated way at the prospect of banning the import of Russian oil while making sure that there is still an appropriate supply of oil on world markets,” he said. “That’s 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 avoiding Russian products already. Sixty-six percent (66%) of Russian oil is struggling to find buyers, according to an analysis by JPMorgan Chase (JPM).
The U.S. average for a gallon of gas topped $4 U.S., according to AAA, in a rapid move due to the Ukraine conflict. The underlying cost of oil accounts for more than 50% of the cost of gas that consumers put in their cars.
Prices for gas at the pump in Canada are nearing $2 per litre in many areas across the country, according to market reports.