By Adedapo Adedapo
After surging above $130 earlier on Monday, oil prices, especially Brent, retreated to $123.6 per barrel as markets panicked over a possible embargo of Russian crude oil, with the price of the United States West Texas Intermediate (WTI) trading at $119.8 per barrel.
The United States and its European allies are discussing the possibility of a ban on Russian oil imports in the latest attempt to punish Russia for its invasion of Ukraine.
Early on Monday morning, prices jumped as trading began with the market reacting to supply disruptions stemming from Russia’s ongoing invasion of Ukraine and the possibility of a ban on Russian oil and natural gas.
Germany said it has no plans to halt Russian energy imports, indicating that the US is exploring replacement barrels from Venezuela and Saudi Arabia.
The US Secretary of State Antony Blinken said, “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.
“That’s a very active discussion as we speak.”
Meanwhile, Speaker Nancy Pelosi also said that the US House of Representatives is exploring strong legislation to ban the import of Russian oil — a move which would “further isolate Russia from the global economy.”
“Our bill would ban the import of Russian oil and energy products into the United States, repeal normal trade relations with Russia and Belarus, and take the first step to deny Russia access to the World Trade Organization. We would also empower the Executive branch to raise tariffs on Russian imports,” she wrote.
While Western sanctions against Russia have so far allowed the country’s energy trade to continue, most buyers are avoiding Russian products already.
Analysts warn that prices are likely to rise in the short term, with a move toward $150 a barrel not out of the question, warning that this will put further pressure on global economies, pushing inflation higher, leaving central banks debating how quickly rate hikes should be implemented.
