Oil prices jumped on Monday, as the Ukraine conflict raged on with no sign of a ceasefire and reports suggested the European Union will likely step up sanctions on Russia to target its lucrative energy sector.
Brent crude futures for May delivery climbed $3.57, or 3.3 percent, to $111.57 a barrel, while U.S. West Texas Intermediate (WTI) crude futures for May settlement were up $3.8, or 3.7 percent, to $106.88 a barrel.
With little sign of the Russia-Ukraine conflict easing, the prospect of large-scale disruptions to Russian oil production is threatening to create a global oil supply shock, the IEA said in its oil market report for March 2022 released last week.
European Union governments will consider joining the United States in a Russian oil embargo as they gather this week with U.S. President Biden for a series of summits.
If “negotiations” with Russian President Vladimir Putin fail then “that would mean that this is a third World War,” Ukrainian President Volodymyr Zelenskyy warned as Russian forces broadened their bombardment of the besieged Ukrainian city of Mariupol.
A weekend attack on Saudi oil facilities has also caused jitters. Top crude exporter Saudi Arabia announced a “temporary reduction” in oil output at a facility run by energy giant Aramco on Sunday, after Yemen’s Houthi rebels launched multiple cross-border attacks.