Petroleum prices rose in volatile trading on Wednesday, supported by disruption of Russian and Kazakh crude exports via the Caspian Pipeline Consortium (CPC) pipeline.
Brent crude futures were up $5.22, or 4.5%, at $120.75 U.S. per barrel. Prices had earlier fallen to a low of $114.45.
U.S. West Texas Intermediate (WTI) crude futures rose $4.97, or 4.6%, to $114.24 a barrel. The contract had earlier slipped to a low of $108.38.
The market remains on edge over the prospect of further sanctions on Russia, the world’s second-largest crude exporter, after its invasion of Ukraine, actions that Moscow calls a “special operation”.
U.S. President Joe Biden is set to announce more Russian sanctions when he meets with European leaders on Thursday in Brussels, including an emergency meeting of NATO.
European Union member countries remain split on whether to ban imports of Russian crude and oil products which still continue to flow, but this might change once short-term contracts run out.
Russia on Tuesday warned of a drop in oil exports via the CPC of up to one million barrels per day (bpd), or 1% of global oil production, because of storm-damaged berths.
CPC exports stopped fully on Wednesday and repairs will take at least one and a half months, according to a port ship agent.
Plunging crude stockpiles in the United States, the world’s biggest oil consumer, also added to the apprehension around supply.
The latest data from the American Petroleum Institute industry group showed U.S. crude stocks fell by 4.3 million barrels for the week ended March 18