Global crude oil prices surge as US imposes ban on Russian Oil

Biznextindia : Global Crude oil prices witness sharp surge following the US’ ban on oil imports from Russia, the world’s second largest oil exporter.

The benchmark Brent Crude oil ( for May contract) once again breached the USD 130 mark to reach USD 131.44 a barrel. The Western Texas Intermediate (WTI) for April contract, also surged to USD 126.60 a barrel, while the opec basket also surged to USD 126 a barrel. The Indian basket also surged to USD 126 a barrel.

The sharp rise in Crude oil prices is set to significantly increase India’s oil import bill in the coming months. India, the second largest oil importer in the world, imports about two third of its oil needs.
The United States has imposed ban on Russian oil. Following this ban, Russian oil will no longer be accepted at US ports.

“Today, I’m announcing that the United States is targeting a main artery of Russia’s economy. We are banning all imports of Russian oil and gas” twitted US President Joe Biden.

“Russian oil will no longer be accepted at U.S. ports — and the American people will deal another powerful blow against Putin’s war machine” he said in another twit.

The Ban on Russian oil is likely to have severe impact on global crude oil prices as compared to the sanctions on Iran and Venezuela as Russia exports around 5 million barrels per day (bpd) and 2.8 million bpd.
According to an analysis by ‘Bank of America’, a ban on Russian crude would create a supply deficit of 5 million or more bpd in the global crude oil market, which would push the prices to USD 200 bpd.