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NEW DELHI: Global crude oil prices neared record highs in early deals on Monday after reports said that the US and European allies are looking at banning Russian oil imports following its invasion of Ukraine.
Brent crude hit a high of $139.13 per barrel, before easing a bit. Around 0930am, Brent May futures on the Intercontinental Exchange traded at $128.46, up 8.76% rom previous close.
The April contract of West Texas Intermediate (WTI) on the NYMEX jumped 7.47% to $124.32 a barrel.
Prices soared after US Secretary of State Antony Blinken during an interview on Sunday said, “We are now talking to our European partners and allies to look in a coordinated way at the prospect of banning the import of Russian oil, while making sure that there is still an appropriate supply of oil on world markets."
Rahul Kalantri, vice president, commodities, Mehta Equities, said along with concerns over a likely ban on Russian oil, delays in the potential return of Iranian crude to global markets also pushed prices higher.
"Russia exports 4 million to 5 million barrels of oil daily, making it the second-largest crude exporter in the world after Saudi Arabia. We expect crude oil prices to remain firm amid geo-political tensions and rising demand," he said.
International Energy Agency's (IEA) announcement on 4 March that its member countries will release 61.7 million barrels of oil, higher than the initial commitment of 60 million barrel, failed to soothe prices. IEA member countries had unanimously agreed on 1 March for an initial emergency response plan to alleviate the increasing tightness in oil markets resulting from Russia’s invasion of Ukraine.
A recent report by Kotak Institutional Equities said the IEA's announced release may not be sufficient to offset an impact to Russian exports.
The incessant rise in global crude prices have lifted the Indian energy basket, comprising of Oman, Dubai and Brent crude. It was at $111.61 per barrel on 4 March, according to data from the Petroleum Planning & Analysis Cell of the Ministry of Petroleum and Natural Gas.
Spiraling oil prices are a cause of concern for India as the country imports 85% of its oil demand.
Although, the increase in crude oil prices has not been transferred to the consumers so far, with retail fuel prices unchanged for the over three months now on the buildup to the ongoing state assembly elections. Market experts, however, believe that with elections scheduled to end this week, retail prices of petrol and diesel will be increased going ahead.
In the national capital, the retail price of petrol on Monday was ₹95.41 a litre, while diesel sold for ₹86.67 per litre.
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