December 9, 2023

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Oil rises towards $130 as Russian crude struggles to find buyers

Oil rises towards $130 as Russian crude struggles to find buyers

A worker walks in front of a crane at an oil field owned by Bashneft near the village of Nikolo Berezovka, northwest of the city of Ufa, Bashkortostan, Russia, January 28, 2015. REUTERS/Sergey Karpukhin

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  • US bans Russian oil imports, UK to phase out
  • Chief negotiator for Iran nuclear talks returns to Vienna
  • US inventory report shows Crude inventories rising

LONDON (Reuters) – Oil rose towards $130 a barrel on Wednesday, buoyed by fears of a potential supply shock as the United States banned Russian oil imports and amid signs that some buyers are already starting to act.

On Tuesday, the United States imposed a ban on Russian oil imports, Britain said it would phase out and Shell said it would stop buying Russian crude.

JPMorgan estimated that about 70% of Russian seaborne oil was struggling to find buyers. Read more

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“What is clear is that the current crisis will not be resolved in the foreseeable future and therefore oil prices are expected to remain at high levels,” said Tamas Varga of BVM oil brokerage.

Brent crude rose $1.68, or 1.3 percent, to $129.66 a barrel at 0905 GMT. US West Texas Intermediate (WTI) rose $1.60, or 1.3%, to $125.30.

Oil has risen since Russia, the world’s second-largest oil exporter, launched what it called a “special operation” in Ukraine. Brent crude hit $139 on Monday, its highest since 2008.

One potential source of additional oil supplies is Iran, which has been in talks with Western powers for months to restore a deal that lifted sanctions on Iran in return for curbs on its nuclear programme.

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But the talks were complicated by a last-minute request from Russia. Iran’s chief negotiator for the Vienna talks returned to the Austrian capital on Wednesday. Read more

Amid fears of a supply shortage, there are indications that the market is not short of oil yet.

US crude stocks rose by 2.8 million barrels, according to market sources citing figures from the American Petroleum Institute, an industry group, on Tuesday. Official US inventory numbers are due at 1530 GMT. [EIA/S]

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Additional reporting by Yuka Obayashi and Mohi Narayan; Editing by Jason Neely

Our criteria: Thomson Reuters Trust Principles.