Oil price settles near 2014 high on Russia-Ukraine escalation

Global benchmark Brent crude LCOc1traded as high as US$99.50 a barrel, its highest since September 2014, before settling at $96.84 with a $1.52, or 1.5%, gain. U.S. West Texas Intermediate (WTI) crude CLc1also hit a seven-year high as it peaked at $96 a barrel, before ending at $92.35, $1.28, or 1.4%, higher from Friday. The U.S. market was closed on Monday for a public holiday.

NEW YORK: Oil edged close to US$100 a barrel on Tuesday after Moscow ordered troops into two breakaway regions in eastern Ukraine, but pared gains to end near 2014 highs following Western efforts to stop what they fear is the beginning of a full-scale Russian invasion.

The United States and Britain announced sanctions targeting Russian banks, while the European Union blacklisted more politicians and Germany put the brakes on the $11 billion Nord Stream 2 gas pipeline project.

"The market obviously pumped in excess risk premium as Russia entered the separatists’ portion of the Ukraine and this fear premium gradually dissolved," said Jim Ritterbusch, president of Ritterbusch and Associates in Galena, Illinois.

Global benchmark Brent crude LCOc1traded as high as US$99.50 a barrel, its highest since September 2014, before settling at $96.84 with a $1.52, or 1.5%, gain.

U.S. West Texas Intermediate (WTI) crude CLc1also hit a seven-year high as it peaked at $96 a barrel, before ending at $92.35, $1.28, or 1.4%, higher from Friday. The U.S. market was closed on Monday for a public holiday.

U.S. President Joe Biden announced the first wave of sanctions against Russia, targeting Russian banks and sovereign debt, and vowed steeper punishments ahead if Russia continues its aggression. The sanctions did not include energy supplies. Read full story

The Ukraine crisis has added further support to an oil market that has surged on tight supplies as demand recovers from the COVID-19 pandemic.

The Organization of the Petroleum Exporting Countries (OPEC) and allies, together known as OPEC+, have resisted calls to boost supply more rapidly.

Nigeria's minister of state for petroleum on Tuesday stuck to the OPEC+ view that more supply was not needed, citing the prospect of more production from Iran if its nuclear deal with world powers is revived.

Talks on restoring a deal to curb Iran's nuclear programme and ease sanctions are near conclusion, a Russian envoy said, which could eventually boost Iran's oil exports by more than 1 million barrels per day.- Reuters