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A boat sails past the Umm Qasr port near Iraq's southern port city of Basra on February 11, 2022. Photo: AFP
ERBIL, Kurdistan Region - Brent crude oil prices have soared up to $130 and are closing in on their all-time high level as the United States calls for a ban on crude oil imports from Russia.
A barrel of Brent oil neared $140 dollars on Monday, heading towards a 2008 record high before it soon dropped to $130.
A barrel of oil reached its all-time high of $147 in July of 2008.
The hike in oil prices comes as the Russian invasion of Ukraine entered its 12th day, and countries across the world have strongly condemned the Russian offensive, imposing strict sanctions on the country, as well as several Russian diplomats and businesses.
The sanctions have had a global impact on oil as Russia holds around five percent of the world’s oil reserves.
On Sunday, US Secretary of State Antony Blinken said during NBC talk show Meet the Press that America is “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."
Blinken’s comment follows a series of crippling sanctions that have already taken a significant toll on the Russian economy and Russian citizens, but are yet to impact Russian President Vladimir Putin’s assault on Ukraine.
CHART OF THE DAY: The Brent crude oil market, since the launch of futures in June 1988 to today (nominal prices). The high today was $139.13 a barrel, still below the all-time high of $147.50 a barrel set in July 2008. #OOTT #Ukraine pic.twitter.com/VynyshFCt8
— Javier Blas (@JavierBlas) March 6, 2022
The price per barrel of Brent Crude oil has increased by 33 percent since Russia’s invasion of Ukraine began. It hit over $110 per barrel on Wednesday.
On the first day of the invasion, the price of a barrel surpassed $100 for the first time since 2014.
The spike in oil prices could benefit the Middle East as many countries in the region are key oil producers.
Iraq’s economy has been booming with the surge in prices as it is dependent on oil revenues.
The isolation of Russia has provided Iran with a renewed opportunity to enter the oil market again and for the US to reach an agreement with Tehran in Vienna.
However, uncertainty regarding the nuclear talks loom since Russia demanded on Sunday US guarantees that sanctions will not affect its trade with Iran. The new Russian approach to the deal could potentially further delay the talks, destabilizing the market.
Iran’s 2015 nuclear deal with world powers allowed it to sell crude oil on the international market, but former US President Donald Trump withdrew from the accord in 2018, forcing Iran to sell its clandestinely, likely at a major price markdown. The restoration of the deal will enable Iranian oil to enter markets, stabilizing the price.
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