After soaring to its highest level in eight years, the price of Oman crude slipped to $108.87 per barrel on Friday after losing about $7.86 a barrel in trading on the Dubai Mercantile Exchange (DME). This compares with an overnight price of $116.73 per barrel – a level last seen in 2013.
On international markets there was significant volatility with Brent crude rising as high as $114.23 a barrel before sliding to just over $112 a barrel. Reuters ascribed the volatility to fears over disruption to Russian oil exports in the face of Western sanctions offset the prospect of more Iranian supplies in the event of a nuclear deal with Tehran. US West Texas Intermediate (WTI) added $2.21, or 2.1 per cent, to $109.88 after touching a high of $112.84.
"Russia's invasion of Ukraine means that fears over supply will remain front and centre," said Stephen Brennock of oil broker PVM, though he added that there is "a new sense of urgency" to revive the Iranian nuclear deal.
Crude oil hit its highest in a decade this week and prices are set to post their strongest weekly gains since the middle of 2020, with the U.S. benchmark up more than 18 per cent and Brent 13 per cent.
On Thursday prices swung in a $10 range but settled lower for the first time in four sessions as investors focused on the revival of the Iran nuclear deal, which is expected to boost Iranian oil exports and ease tight supplies.
Oil prices are rising on fears that Western sanctions over the Ukraine conflict will disrupt shipments from Russia, the world's biggest exporter of crude and oil products combined.
Trading activity for Russian crude has slowed as buyers hesitate to make purchases because of sanctions against Russia while US President Joe Biden comes under growing pressure to ban US imports of Russian oil.
More oil supplies are set to be added from a coordinated release of 60 million barrels of oil reserves by developed nations, agreed this week. Japan said on Friday that it plans to release 7.5 million barrels of oil. (With inputs from Reuters)
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