Oil jumped with traders keeping a close eye on ongoing geopolitical tensions as Ukraine said several government and bank websites were hit by cyberattacks.
Futures in New York rose as much as 2.2%, while Brent rose above $98 after coming just 50 cents shy of $100 on Tuesday. Ukraine said its several government and bank websites are not functioning due to a distributed denial-of-service attack government. Last week, Ukraine said it suffered its wost DDoS attack in its history.
On Tuesday, U.S. President Joe Biden announced sanctions targeting Russia’s sale of sovereign debt abroad and the country’s elites, responding to what he described as the start of an invasion of Ukraine, but avoided a sweeping package of penalties.
Headline crude prices have been subject to wild swings over the last week amid conflicting geopolitical headlines from Ukraine and the Iran nuclear talks. Beyond that, Brent’s prompt spread has surged to an unprecedented level, indicating continued tight supply in the market. As tensions in Ukraine add to the risk of supply disruptions, the International Energy Agency said its members are ready to act to ensure global oil markets are adequately supplied. Moscow has repeatedly denied that it plans to invade its smaller neighbor.
Iran’s foreign minster said on Wednesday that it wants to settle the remaining issues in the coming days, but that it won’t concede on its red lines “under any conditions.” Any restoration of Iranian barrels to the global market would help ease tightness.
The U.S. is in discussions with oil exporters and importers to try to smooth fallout from any escalation in hostilities and sanctions, Daleep Singh, Biden’s deputy national security advisor, said at the White House. The talks include the possibility of tapping strategic oil reserves on top of the plan announced last year, he said.
Prices
- West Texas Intermediate for April delivery rose $1.32 to $93.23 a barrel at 10:30 a.m. in New York.
- Brent for April settlement rose $1.36 to $98.20 a barrel
One area of the market that is coming under pressure is the value of Russia’s Urals crude. The grade was offered at its biggest discount in at least a decade on Tuesday. At the same time a South Korean oil buyer purchased Middle Eastern crude, apparently as an alternative to Russian oil.
Meanwhile in the Persian Gulf, Iran is moving more oil onto ships to speed up exports should the Iran nuclear deal be revived. While it would need a few months to ramp up production, Iran could restore about 1 million barrels a day of supply to global markets, Vitol Group CEO Russell Hardy said in a Bloomberg Television interview this week.
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