For the second consecutive day, Oman crude posted a sharp increase in value, gaining a hefty $5.92 a barrel in trading on the Dubai Mercantile Exchange (DME) on Thursday to settle at $116.73/b – a level last scaled in 2013.
It comes just 24 hours after a historic single-day spike of $9.96 lifted the price of Oman crude to a new multi-year high of $110.81/b on Wednesday.
According to Reuters, international oil benchmarks too posted sharp upticks in their value as oil markets remained in a state of flux in the aftermath of Russia’s military assault against Ukraine. Benchmark Brent crude oil prices climbed close to $120 a barrel on Thursday, with Russian oil exports disrupted as traders try to avoid becoming entangled in sanctions.
Support also came from US crude stockpiles at multi-year lows, helping to lift Brent crude futures as high as $119.84 a barrel for the highest level since 2012. By 1316 GMT the contract was up $4.04, or 3.6 per cent, at $116.97 a barrel.
Brent has jumped by about 37 per cent in the past 30 days and the contract's six-month spread hit a record high on Thursday at more than $21 a barrel, indicating very tight supplies.
US West Texas Intermediate crude hit a high of $116.57, its loftiest since 2008, before retreating a little to $114.34, up $3.74 or 3.38 per cent. The gains followed a fresh round of US sanctions that target Russia's oil refining sector, raising concerns that Russian oil and gas exports could be targeted next.
Russia competes with Saudi Arabia for the title of biggest crude oil and refined oil products exporter, with shipments of more than 7 million barrels per day (bpd), about half of which go to Europe.
While wielding economic sanctions to try to make Russia call off its invasion of Ukraine, Washington has so far stopped short of targeting Russia's oil and gas exports, weighing the impact on global oil markets and US energy prices.
Still, traders held off Russian oil products anyway. At least 10 tankers failed to find buyers on Wednesday, market sources said. "We expect that Russian oil exports will plunge by 1 million bpd from the indirect impact of sanctions and voluntary actions by companies," said Rystad Energy CEO Jarand Rystad. "Oil prices are likely to continue to climb – potentially beyond $130 per barrel."
The Organization of the Petroleum Exporting Countries (OPEC) and allies including Russia, collectively known as OPEC+, decided to maintain an increase in output by 400,000 bpd in March despite surging prices, snubbing calls from consumers for bigger increases. (With inputs from Reuters)
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