Sonali Paul

MELBOURNE (Reuters – Oil prices swung near 14-year lows Tuesday after the United States considers acting unilaterally to ban Russian oil imports, rather than collaborating with Europe’s allies. It is reducing concerns that there will be a greater disruption of crude oil supplies.

The futures traded up 1.06 points or 0.9% at $124.27/barrel at 0223 GMT. After trading at highs of $125.19, they dropped to $121.31 after dipping.

U.S. West Texas Intermediate’s crude futures increased 36 cents (or 0.3%) to $119.72/barrel after trading within a range of approximately $4.

These erratic actions came after a Monday surge to close to 14-year-highs. On Monday, the Biden Administration stated that it had been talking with France, Britain and Germany to ban Russian oil.

“The price rise has been too rapid and aggressive for too little time. “The charts tell us that the oil price must take some time digesting before it can move significantly higher,” stated Michael McCarthy, chief strategist at Tiger Brokers Australia.

Officials said late Monday that the United States would continue with an exclusive ban, while Germany, which is the largest buyer of Russian crude oil, denied plans to impose an energy embargo.

A top U.S. official spoke on condition of anonymity to tell Reuters that no decision was made, but it is possible (to be only the U.S. if this happens).

Russia exports about 7,000,000 barrels per day crude oil products and other petroleum products.

Vivek Dhar, Commonwealth Bank commodities analyst, stated that markets have priced in the possibility of significant disruptions to Russian oil exports. He also pointed out how trade finance has been affected by sanctions against Russian banks.

Analysts have predicted that oil prices would rise to $200 per barrel if all Russian oil exports are blocked from international markets. Russia’s deputy prime Minister said the oil price could reach $300.

“There’s no world capacity at this moment to replace 7,000,000 barrels of exporteds,” OPEC Secretary-General Mohammad Barkindo stated to reporters during an industry conference in Houston.

Viva Energy Australia and Ampol Ltd Australia said that after Moscow invaded Ukraine, they have stopped buying Russian crude.

Oil inventories are continuing to drop worldwide, which means that there will be disruptions in oil supplies. Five analysts polled for Reuters said that average stockpiles fell by 800,000. barrels during the week ending March 4.

It was done ahead of Tuesday’s weekly inventory report from the American Petroleum Institute.