Oil prices are close to US $ 140 before a possible veto of Russian crude

The oil prices They climbed on Monday to the highest since 2008, given the possibility that the United States and its European allies decide to apply a veto to imports of crude oil from Russia, to which was added a delay in the agreement with Iran that could release more supply in the market.

At the start of the Asian session, Brent crude reached US$139.13 a barrel, while US West Texas Intermediate (WTI) futures reached US$130.50. The two benchmark contracts have peaked since July 2008.

As of 10:17 GMT, prices had lost some of those gains, but Brent was up $6.60, or 5.6%, at $124.71 a barrel; and WTI rose $6.67, or 5.8%, to $122.35 a barrel.

The United States and its European allies are considering a ban on Russian oil imports, Secretary of State Antony Blinken said on Sunday, as the White House coordinates with congressional committees to eventually enforce the ban.

Analysts at Bank of America said that if most of Russia’s oil exports are cut off, there could be a shortfall of 5 million barrels per day (bpd) or more, and that means oil prices could rise as high as $200.

Analysts at JP Morgan said oil could rise to $185 this year, while experts at Mitsubishi UFJ Financial Group Inc (MUFG) estimated crude oil could hit $180 and trigger a global recession.

“If the supply shortage does not ease, oil may exceed its all-time high”, commented Howie Lee, an economist at OCBC Bank of Singapore. “In the worst case, that is, a total sanction on Russia’s energy exports, I would not be surprised to see Brent above US$200”, he added.

Russia is the world’s leading exporter of crude oil and petroleum products combined, with shipments of around 7 million bpd, or 7% of global supply. Some volumes of Kazakhstan’s oil exports from Russian ports have also faced complications.

Global oil prices have soared more than 60% since the start of 2022, along with other commodities, raising concerns about global economic growth and stagflation.

China, the world’s second largest economy, is already targeting slower growth of 5.5% this year.

With information from Reuters