Muscat – Already high oil prices rose further on Wednesday following US President Joe Biden’s ban on imports of Russian crude.
Oman crude contract price (for May 2022 delivery) at Dubai Mercantile Exchange (DME) on Wednesday, went up by US$4.78 to reach US$127.71 per barrel.
In Wednesday trade, Brent was sitting at around US$130 per barrel, while West Texas Intermediate was hovering around US$125 per barrel.
Biden has imposed an immediate ban on Russian oil and other energy imports in retaliation for Russia’s invasion of Ukraine, while the United Kingdom said it would phase out imports by the end of 2022.
The latest sanctions are likely to push up oil prices – resulting in even higher prices at the pump.
“Russian oil will no longer be acceptable at US ports and the American people will deal another powerful blow to Putin’s war machine,” Biden said on Tuesday, adding that the decision was taken ‘in close consultation’ with allies.
The Russian- Ukraine crisis has fuelled fears that the fragile global recovery from COVID-19 will be replaced by a period of stagflation, in which inflation surges and economies flatline or contract.
Crude is the main worry as the removal of Russia’s output will compound an already tight market. Russia is the world’s third-biggest oil producer.
Warnings that Biden would put an embargo on imports from Russia sent Brent prices soaring to as high as US$139 on Monday – about US$8 short of a 2008 record – before they retreated.
However, confirmation of the ban Tuesday, sent the black gold roaring up again.
EU nations, which receive roughly 40 percent of their gas imports and one quarter of their oil from Russia, instead opted to set a goal of cutting their Russian gas imports by two-thirds.
The oil ban is the latest volley at Russia, which has been hit with a series of wide-ranging and strict sanctions that have crippled the economy, and led numerous firms to exit with giants McDonald’s, Coca-Cola and Starbucks the latest.