Published by Jessica Weisman-Pitts
Posted on March 2, 2022
3 min readLast updated: February 8, 2026
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By Noah Browning
LONDON (Reuters) -Oil prices surged on Wednesday as supply disruptions mounted after sanctions on Russian banks amid the intensifying Ukraine conflict, while traders scrambled to seek alternative oil sources in an already tight market.
Brent crude futures rose by nearly $9, touching the highest since June 2014 at $113.94 a barrel before easing to $110.82 at 1510 GMT for a gain of $5.85, or 5.6%.
U.S. West Texas Intermediate (WTI) crude futures jumped more than $9 to $112.51 a barrel, hitting the highest since May 2011 before losing some steam to trade up $5.41, or 5.2%, at $108.82.
“Investors, traders, and politicians alike are scrambling to address the worsening Russia-Ukraine standoff. The initial upward price reaction after the conflict in Ukraine started six days ago is only intensifying,” said Rystad Energy analyst Louise Dickson.
“The current realistic scenario is that a large portion of Russian crude oil, as well as refined oil products, will no longer be palpable to the market and create a supply deficit for the duration of the armed conflict.”
The White House on Wednesday said that the United States is “very open” to imposing sanctions on Russia’s oil and gas industry.
Trade in Russian oil was in disarray as producers postponed sales, importers rejected Russian ships and buyers worldwide searched elsewhere for crude as Western sanctions and pullouts by private companies squeezed Russia.
Russian oil exports account for about 8% of global supply.
Exxon Mobil on Tuesday said it would exit Russia oil and gas operations as a result of Moscow’s invasion of Ukraine. The decision will see the company pull out of managing large production facilities on Sakhalin Island in Russia’s Far East.
The Organization of the Petroleum Exporting Countries, Russia and allies, together known as OPEC+, agreed on Wednesday to again raise their monthly output by 400,000 barrels per day.
U.S. President Joe Biden warned Vladimir Putin that the Russian leader “has no idea what’s coming” in a State of the Union speech dominated by Russia’s invasion of Ukraine.
Meanwhile, a coordinated release of 60 million barrels of oil agreed on Tuesday by International Energy Agency member countries failed to reassure the market and prices rose after the announcement.
In a move likely to exacerbate global supply tightness, buyers are avoiding oil from the CPC pipeline originating in Kazakhstan, source of more than 1% of the world’s supply, owing to sanctions concerns.
(Additioanl reporting by Sonali Paul in Melbourne and Muyu Xu in Beijing; editing by Jan Harvey and David Goodman)
Brent crude oil is a major trading classification of crude oil originating from the North Sea, used as a benchmark for pricing oil globally.
West Texas Intermediate (WTI) is a grade of crude oil used as a benchmark in oil pricing, primarily produced in the United States.
The Organization of the Petroleum Exporting Countries (OPEC) is a group of oil-producing countries that coordinates and unifies petroleum policies to stabilize oil markets.
A supply deficit occurs when the demand for a product exceeds its available supply, leading to potential price increases.
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