By Ahmad Ghaddar

LONDON, (Reuters) – A Western alliance decision to exclude certain Russian banks SWIFT payment system from Saturday is expected to raise oil prices to well over $100 a barrel due to increased risks associated with Russian oil trading.

SWIFT (or the Society for Worldwide Interbank Financial Telecommunication) is a secure messaging platform that allows for fast cross-border payments and facilitates international trade.

Analysts and traders said that the Western sanctions will severely impact Russian exports of any commodity, from oil and metals to grain.

At most 10 commodities and oil traders spoke on condition anonymity to Reuters, saying that the flow of Russian goods to the West would be severe disrupted, if not halted, for several days or weeks, until exemptions are established.

Amrita Sen, a consultant at Energy Aspects stated that the prices would definitely rise above $100 and likely return to their highs of $105.

But I would not rule out a quick jump to $110/barrel,” she said.

When the Russian invaded Ukraine, oil prices rose to $100 per barrel. Brent reached $105 per barrel for first time since mid 2014. [O/R]

By Friday, the prices had fallen below $100 per barrel

Sen stated that while SWIFT is being exempted from energy transactions, it can still disrupt energy trade flows for the short term. At least, until buyers change to Telex or another system. He also said that other commodities trade will be more difficult without exceptions.

This includes restrictions on Russian central bank international reserves. It is intended to prevent President Vladimir Putin’s use of $630 billion central bank foreign currencies reserves for invasion of Ukraine, and also protect a plummeting ruble.

The allies are yet to disclose which banks they will target, but analysts believe that, if Sberbank, VTB and Gazprombank is on the list, it could have a huge impact on Russia’s economy and ability to do business in Russia.

According to a U.S. official, the bank that is cut off by SWIFT will have to use fax or phone to send a payment to a foreign bank.

The official claimed that all Russian-bank transactions would be stopped by most global banks.

Giovanni Staunovo, UBS analyst and reference to SWIFT ban: “The risk for involuntary petroleum supply disruptions has increased after the latest announcements.”

“Considering the low inventory and diminishing reserves, oil prices will likely respond in a sensitive manner and open higher,” he said.

Japan, Prime Minister Fumio Kirshida announced Sunday that it will join Western allies to block Russian banks accessing the SWIFT international money system.