By Yuka Obayashi and Mohi Narayan

TOKYO, Reuters – On Wednesday oil prices rose due to fears about a supply shock after the United States ban Russian oil imports. There are also signs that buyers may be avoiding them.

After jumping 3.9% yesterday, futures were $2.91 higher, or 2.277% at $130.89/barrel at 0520 GMT.

U.S. West Texas Intermediate oil futures surged 3.6% Tuesday to $126.04/barrel, equating to $2.34 (1.89%)

As a response to Russia’s invasion of Ukraine, the U.S. President Joe Biden imposed an immediate ban upon Russian oil and energy imports on Tuesday. Britain also announced that it will phase out Russian oil imports by 2022.

Shell (LON 🙂 stated Tuesday that it would cease buying Russian crude oil, and will phase out all Russian hydrocarbons. It became one of the major Western oil companies who has completely abandoned Russia.

Goldman Sachs (NYSE) estimated that nearly half of Russian oil shipped from ports was unsold. JP Morgan, however, estimated that around 70% Russian seaborne oil had not been sold.

The oil market has risen more than 30% in the past month since Russia (the world’s second-largest exporter of crude oil) launched what it described as a “special operation” in Ukraine. Analysts said that buying has been boosted by fears of disruptions in oil supplies due to the escalating Moscow sanctions.

Vandana Hari founder Vanda Insights, an oil market analysis company Vanda (NASDAQ) said that “the upward pressure on oil price continues to increase as the market digests U.S. import bans on Russian barrels”

On Monday, oil prices rose to the highest level since July 2008. Brent reached $139.13 per barrel while WTI was $130.50.

Hiroyuki Kikukawa (OTC:) Securities, said that “on top of the U.S.’s and Britains announcement effects,” he added. He also mentioned that fears of additional disruptions in Russia supply due to Russia’s intensifying sanctions on Moscow prompted new buying.

He stated that “Monday’s highs could become a ceiling short-term as speculative buy is likely to slow down soon, and countries in northern hemisphere will head to spring when fuel consumption drops”, he added.

The stocks increased by 2.8million barrels during the week that ended March 4. This was contrary to analysts’ predictions of a fall. However, market sources have reported Tuesday that gasoline and distillate stocks declined.[EIA/S]