Calendar An icon of a desk calendar. Cancel An icon of a circle with a diagonal line across. Caret An icon of a block arrow pointing to the right. Email An icon of a paper envelope. Facebook An icon of the Facebook "f" mark. Google An icon of the Google "G" mark. Linked In An icon of the Linked In "in" mark. Logout An icon representing logout. Profile An icon that resembles human head and shoulders. Telephone An icon of a traditional telephone receiver. Tick An icon of a tick mark. Is Public An icon of a human eye and eyelashes. Is Not Public An icon of a human eye and eyelashes with a diagonal line through it. Pause Icon A two-lined pause icon for stopping interactions. Quote Mark A opening quote mark. Quote Mark A closing quote mark. Arrow An icon of an arrow. Folder An icon of a paper folder. Breaking An icon of an exclamation mark on a circular background. Camera An icon of a digital camera. Caret An icon of a caret arrow. Clock An icon of a clock face. Close An icon of the an X shape. Close Icon An icon used to represent where to interact to collapse or dismiss a component Comment An icon of a speech bubble. Comments An icon of a speech bubble, denoting user comments. Ellipsis An icon of 3 horizontal dots. Envelope An icon of a paper envelope. Facebook An icon of a facebook f logo. Camera An icon of a digital camera. Home An icon of a house. Instagram An icon of the Instagram logo. LinkedIn An icon of the LinkedIn logo. Magnifying Glass An icon of a magnifying glass. Search Icon A magnifying glass icon that is used to represent the function of searching. Menu An icon of 3 horizontal lines. Hamburger Menu Icon An icon used to represent a collapsed menu. Next An icon of an arrow pointing to the right. Notice An explanation mark centred inside a circle. Previous An icon of an arrow pointing to the left. Rating An icon of a star. Tag An icon of a tag. Twitter An icon of the Twitter logo. Video Camera An icon of a video camera shape. Speech Bubble Icon A icon displaying a speech bubble WhatsApp An icon of the WhatsApp logo. Information An icon of an information logo. Plus A mathematical 'plus' symbol. Duration An icon indicating Time. Success Tick An icon of a green tick. Success Tick Timeout An icon of a greyed out success tick. Loading Spinner An icon of a loading spinner.

Oil hovers around $100 after West holds off on energy sanctions

© Supplied by BloombergRussian President Vladimir Putin. Source: Bloomberg
Russian President Vladimir Putin. Source: Bloomberg

Oil pushed higher in Asian trading following a wild session in which prices spiked above $100 a barrel before giving up gains after Russian energy supplies were spared from sanctions.

West Texas Intermediate climbed around 3% after surging more than 9% at one point on Thursday. Oil pared most of that advance as US President Joe Biden made it clear that Western powers were not willing to sacrifice their own economies to penalise Moscow for its invasion of Ukraine. Global benchmark Brent crude got close to $106 a barrel during the dramatic session.

While the US imposed its toughest ever sanctions on Russia as its tanks and troops moved closer to the Ukrainian capital, it said restrictions on currency clearing would include carve-outs for energy payments, a crucial source of revenue for Moscow. Biden also said Russia will not be barred from the Swift international banking network because Europe opposed that action.

“The initial concerns that oil would be caught up in any sanctions on Russia has eased, resulting in prices pulling back from yesterday’s rally,” said Daniel Hynes, a senior commodity strategist at Australia & New Zealand Banking Group Ltd. “However, steep discounts being offered for Russian crude are still not receiving bids. This suggests there may still be some supply issues if banks can’t facilitate trade in the short term.”

WTI for April delivery climbed 2.8% to $95.43 as of 9:40 a.m. in Singapore after settling 0.8% higher on Thursday
The U.S. benchmark is up 4.8% for the week
Brent for April settlement advanced 2.8% to $101.82 after closing up 2.3% in the previous session when it peaked at $105.79

Russia’s invasion of Ukraine has spooked a global oil market that was already perilously tight due to the inability of supply to keep up with the demand recovery from the pandemic. Biden said the US is working with other major consuming nations on a coordinated reserves release. Any such sales would need to be very large to have a major impact on prices, however.

Japan and Australia have indicated they may be part of an international reserves release, but China said it had no immediate plans to intervene in oil markets. A spokesperson for Beijing said it would only consider such a move when the geopolitical situation had stabilised.

Brent crude is still deep in backwardation, even after the West didn’t sanction Russian energy, highlighting investor nervousness over the tight supply situation. The global benchmark’s prompt spread was $3.60 a barrel in backwardation compared with $1.82 two weeks ago. The discount of WTI to Brent, meanwhile, ballooned to its widest since April 2020, possibly incentivising traders to explore arbitrage opportunities.

Recommended for you

More from Energy Voice

Latest Posts