U.S. President Joe Biden on Tuesday inflicted an immediate ban on Russian oil. Talk that Ukraine was no longer seeking NATO membership behind some news reports this week on the issue also weighed on prices, traders stated.
Brent crude was down $3.56, or 2.8%, to $124.42 a barrel at 1250 GMT, behind earlier rising past $131. U.S. West Texas Intermediate (WTI) dropped $3.99, or 3.2%, to $119.71.
As stated by the Energy Information Administration, the United States imported more than 20.4 million barrels of crude; moreover, refined products a month on average from Russia in 2021; approximately 8% of U.S. liquid fuel imports.
Oil also dropped as the head of the IEA described the agency’s decision last week to release 60 million barrels of oil from strategic reserves as “an initial response” and stated that more could be removed if needed.
Brent Scored Its Highest
Crude has swelled after Russia, the world’s second-largest crude exporter, launched what it dubbed a “special operation” in Ukraine. Brent hit $139 on Monday, its highest after 2008.
On Wednesday, Russia declared a new ceasefire in Ukraine to let civilians flee besieged cities behind days of mostly forgotten promises that have left hundreds of thousands of Ukrainians trapped without entry to medicine or freshwater.
In addition to the U.S. Russian oil ban, Britain stated it would phase Russian imports out on Tuesday, and Shell (LON: RDSa) said it would cease buying Russian crude. JP Morgan estimated that about 70% of Russian seaborne oil struggled to find buyers.
One potential source of extra oil supply is Iran, which has been in talks with Western powers for months on continuing its nuclear deal.