Oil is now above $112 a barrel on Friday in a volatile session as fears over disruption to Russian oil exports in the face of Western sanctions is offsetting the prospect of more Iranian supplies in the event of a nuclear deal with Tehran.
Brent crude rose as high as $114.23 a barrel and by 1050 GMT up by $1.97 from $112.43. U.S. West Texas Intermediate (WTI) added $2.21, or 2.1%, to $109.88 after touching a high of $112.84.
Crude oil has hit its highest in a decade this week and prices are set to post their strongest weekly gains since the middle of 2020, with the U.S. benchmark up more than 18% and Brent 13%.
Signs of an escalation in the Russia-Ukraine conflict, with reports of a fire at a Ukrainian nuclear power plant, spooked markets before authorities said the fire in a building identified as a training centre had been extinguished.
On Thursday prices swung in a $10 range but settled lower for the first time in four sessions as investors focused on the revival of the Iran nuclear deal, which is expected to boost Iranian oil exports and ease tight supplies.
Still, Iran’s Foreign Minister Hossein Amirabdollahian said on Friday that the West’s “haste” to reach a nuclear agreement “cannot prevent the observance of Iran’s red lines”, including economic guarantees.
Oil prices are rising on fears that Western sanctions over the Ukraine conflict will disrupt shipments from Russia, the major global exporter of crude and oil products combined.
Trading activity for Russian crude has slowed as buyers hesitate to make purchases because of sanctions against Russia while U.S. President Joe Biden comes under growing pressure to ban U.S. imports of Russian oil. Incidentally, no sanctions have been placed on Russia’s crude oil but many traders are avoiding it in their futures contract since the invasion of Ukraine.
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