Oil prices soared on Sunday to their highest point since mid-2008, as the global market continued to suffer the consequences of Russia’s assault on Ukraine.
The cost of Brent crude – considered the international benchmark – rose more than 9 per cent to a little more than $129 (£98) in the first few minutes of trade on Sunday, according to various reports. Meanwhile, West Texas Intermediate (WTI) crude rose 9.4 per cent to $126.51.
Both hit their highest values back in July 2008 when Brent shot up to $147.50 a barrel and WTI, $147.27.
The figures came after Antony Blinken, the US secretary of state, said the Biden administration and its European allies were exploring the option of banning Russian oil as a way to further sanction Vladimir Putin over his decision to invade Ukraine.
Meanwhile, the UK may move this week to ratchet up sanctions on Russia’s oil and gas industries – as reported by The Independent this week – as part of efforts to isolate Putin’s regime globally.
Europe relies on Russia for crude oil and natural gas, but has become more open to the idea of banning Russian products in the past 24 hours, a source familiar with the discussions told Reuters.
The White House is also talking with the Senate Finance Committee and House of Representatives Ways and Means Committee about a potential ban, the source added.
“We are now in very active discussions with our European partners about banning the import of Russian oil to our countries, while of course, at the same time, maintaining a steady global supply of oil,” Mr Blinken said in an interview on NBC’s Meet the Press.
He said he had discussed oil imports with President Biden’s cabinet over the weekend, too.
While Western sanctions against Russia have so far allowed the country’s energy trade to continue, most buyers are avoiding Russian products already. According to JPMorgan analysis, 66 per cent of Russian oil is struggling to find buyers.
There have been shows of support for the boycott in Britain this week, including on Sunday when a ship carrying Russian oil that was moored in northwest England had to move on after workers made it clear they would not unload the cargo.
A similar scene unravelled in Kent on Friday when dock workers refused to unload a tanker of Russian gas, due to arrive at a Thames Estuary port, forcing it to be diverted.
The Boris Vilkitskiy had been headed to the Isle of Grain, carrying liquified natural gas destined for Centrica, which owns energy company British Gas.
“Oil is rising on the prospect of a full embargo of Russian oil and products,” John Kilduff, of Again Capital, told CNBC about the situation in the US. “Already high gasoline prices are going to keep going up in a jarring fashion. Prices in some states will be pushing $5 pretty quickly.”
The same is happening on Britain’s forecourts, after the average cost of a litre of petrol reached a new high of 153.50p on Thursday this week – up from 152.20p the day before.
The RAC urged the Treasury for support after the same figures, from Experian Capitalist, also showed that the cost of diesel rose from 155.79p to a record 157.47p over the same period.
Russ Mould, an investment director at AJ Bell, told the PA news agency: “With the invasion of Ukraine by Russia now into its second week, stock markets continue to battle the threat of even higher inflation and a potential economic slowdown.”
And he added: “At some point soon, consumers will not be able to cope with even higher prices, so corporates face a big demand test.”