RIYADH: Oil prices surged on Monday to their highest levels in 14 years amid the threat of Western bans on Russian crude imports and renewed uncertainty over a revived nuclear deal with Iran.
Brent crude, the global benchmark, reached almost $140 a barrel, and US West Texas Intermediate passed $130, both figures the highest since July 2008.
Analysts at Bank of America said that if most of Russia’s oil exports were cut off, there could be a shortfall of at least 5 million barrels per day, pushing prices as high as $200.
Global oil prices have spiked about 60 percent since the start of 2022, raising concerns about global economic growth and stagflation. China, the world’s No. 2 economy, is targeting slower growth of 5.5 percent this year.
US Secretary of State Antony Blinken said the US and European allies were exploring banning imports of Russian oil. The White House was coordinating with committees in Congress to move forward with a US ban.
“We consider $125 per barrel, our near-term forecast for Brent crude oil, as a soft cap for prices, although prices could rise even higher should disruptions worsen or continue for a longer period,” UBS commodity analyst Giovanni Staunovo said. A prolonged war in Ukraine could push Brent above $150 per barrel, he said.
JP Morgan analysts said oil could soar to $185 this year, and analysts at Mitsubishi UFJ said oil may rise to $180 and cause a global recession.
Russia is the world’s top exporter of crude and oil products combined, with exports of around 7 million barrels per day, or 7 percent of global supply.
Meanwhile, talks to revive Iran’s 2015 nuclear deal with world powers were mired in uncertainty after Russia demanded a US guarantee that sanctions it faces over the Ukraine conflict would not hurt its trade with Tehran.
Iran’s Foreign Minister Hossein Amirabdollahian said Tehran would not allow “any foreign elements to undermine its national interests,” and the Foreign Ministry said it awaited an explanation from Russia.
France told Russia not to resort to blackmail over efforts to revive the nuclear deal, and Iran’s top security official said the outlook for the talks “remains unclear.”
Iran would take several months to restore oil flows even if it reached a nuclear deal, analysts said.