This weekend WTI crude at one point traded at $130.50 as the Russia situation intensifies and the Iran deal is delayed further. Adding to the ongoing situations is the amount of supply disruptions the world is now seeing from the Russian sanction. This price of $130.50 was the highest price since July 2008. Since then prices have retreated around the $118 mark, opening this morning at $121.33.
While the world already understands what is going on with the invasion of Ukraine, world powers have been reacting in different ways for the past few weeks. It started with talks, led to sanctions, and now could involve the complete ban of Russian oil and natural gas to show Putin the world is not backing down. With some states hovering around $5-7 per gallon to fill up their vehicles, it is clear that this situation with oil supply is worsening, but not having the typical supply from Russia is a problem as traders continue to buy elsewhere. Both the U.S. and its NATO allies are considering a complete ban of any Russian crude and natural gas imports to further isolate Putin’s Russia, in turn hopefully sending a stronger message to the Kremlin.
According to JPMorgan, almost 60% of Russian oil is currently struggling to find buyers for their product. With a Western ban on oil and gas altogether, this number could skyrocket. The United States has made it clear that they will discuss this further with Congress before making a final decision to understand the potential economic impacts to the United States. The U.S. in 2021 imported around 20.4 million barrels of crude and other refined products from Russia per month. This was around 8% of all U.S. fuel important according to the Energy Information Administration (EIA). With Americans now paying on average $4.009 for a gallon of gasoline, bringing stability back to the market for the world’s largest consumer of oil continues to be the pressing matter.