Oil gains on expectations U.S. will ban Russian crude imports

Oil prices rose on Tuesday, with Brent surging past $129 a barrel on expectations that the United States will announce a formal ban on Russian oil imports, stoking supply concerns.

Benchmark Brent crude for May had climbed by 5.4% to $129.91 a barrel by 1345 GMT. U.S. crude for April delivery was up 5% at $125.47.

According to Reuters, prices climbed after a source said the United States, the world’s biggest oil consumer, could announce a ban on Russian oil imports as soon as Tuesday in response to Russia’s invasion of Ukraine.

The White House said U.S. President Biden would announce actions to hold Russia accountable at 1545 GMT, after sources said Washington was willing to impose such a Russian oil import ban even without its European allies.

Russian Deputy Prime Minister Alexander Novak said on Monday that oil prices could climb to more than $300 if the United States and the European Union banned imports of Russian oil.

But some analysts said Washington might stop short of such a ban and that this would prevent a dramatic supply crunch.

Goldman Sachs hiked its Brent forecast for 2022 to $135 from $98, and its 2023 outlook to $115 a barrel from $105, saying that the world economy could face the “largest energy supply shocks ever” because of Russia’s key role.

Dimming expectations of a return of Iranian crude to global markets soon have added to upward pressure on prices, amid a slowdown in talks between Tehran and world powers over its nuclear activity.

Oil supply disruptions come as inventories continue to fall worldwide. Five analysts polled by Reuters estimated on average that U.S. crude stockpiles decreased by about 800,000 barrels in the week to March 4.

The poll was conducted before weekly inventory reports from the American Petroleum Institute, an industry group, on Tuesday and the U.S. Energy Information Administration on Wednesday.