Florence Tan and SonaliPaul

SINGAPORE (Reuters – Brent rose above $116 a bar on Thursday due to supply concerns and trade disruptions caused by Russian sanctions.

The Organization of the Petroleum Exporting Countries (OPEC) and its allies, Russia included, decided to continue an increase of output of 400,000 barrels/day in March in spite of the rising price. They ignored the Ukraine crisis in their negotiations and ignored consumer requests for more oil.

The futures gained to $116.83/barrel, which is the highest price since August 2013. Contracts were at $116.60 per barrel. This was up 3.67 by 0112 GMT.

U.S. West Texas Intermediate crude reached $113.01/barrel, up 2.41 from its previous 11-year peak of $113.31/barrel.

The White House increased pressure on Russia by announcing that it would apply export control measures against Russian oil refining,” ANZ analysts stated in a note.

“This is a concern because Russian oil supplies could continue to face constraints.”

Market reaction to Washington’s latest sanctions against Russia’s oil refining and production sector raised concern that Russian oil-and gas exports might be next.

It has so far resisted the temptation to target Russia’s oil-and gas exports. The Biden administration is currently weighing the impact on the global oil market and U.S. energy markets.

Russia is the world’s No. The International Energy Agency ranked Russia as No.3 oil producer and largest oil exporter to world markets. According to the International Energy Agency, Russian crude oil and products were exported at 7.8 Million barrels per day during December.

Meanwhile, U.S. oil stocks continued to fall. While oil inventories in the US were declining, their key Cushing hub was hit with its lowest levels since 2018. Meanwhile, strategic U.S. reserves fell to near 20 years. [EIA/S]