By Barani Krishnan
Investing.com — Global oil markets jumped more than 10% on Tuesday after ceasefire negotiations between Russian and Ukraine forces failed, prompting traders to push crude prices higher on worries that international sanctions against Moscow would severely crimp the country’s energy exports.
By 12:10 PM ET (16:10 GMT), the most-active contract in global crude benchmark Brent was up $10.47, or almost 11%, at $106.19 a barrel.
U.S. crude’s West Texas Intermediate, or WTI benchmark, was up $9.07, or 9.3%, at $107.53.
Crude prices continued rallying even after the Paris-based International Energy Agency announced the coordinated release of 60 million barrels from the emergency reserves of consuming countries to provide some relief to the expected squeeze on oil from the Russia-Ukraine conflict.
The Paris-based EIA said it intended “to send a unified and strong message to global oil markets that there will be no shortfall in supplies as a result of Russia’s invasion of Ukraine.”
Talks for a halt to the conflict failed to produce an immediate breakthrough on Tuesday and fighting raged anew between the two sides, with Ukrainian President Volodymyr Zelenskyy urging the West to enforce a no-fly zone for Russian aircraft over his country.
The latest developments intensified worries about how the world would cope without a steady supply of oil from Russia, which provides about a tenth of global needs for crude.
The United States, Britain, Europe and Canada blocked the access of various Russian banks to the SWIFT global interbank payment system — squeezing the billions of dollars that Russia trades a day in oil and other commodities.
The West had taken pains initially not to target Moscow’s energy exports with sanctions due to its own reliance on Russian oil and gas.
But that mindset changed over the weekend, with EU officials affirming on Monday their plan to wean the bloc from its dependence on Russian energy, while being prepared to suffer spiraling oil and gas costs in the short-term. Crude prices have risen more than 35% since the year began.
The latest rally in crude came ahead of Wednesday’s meeting of global oil producer alliance OPEC+ which is expected to stay with its gradual output increase strategy, ignoring calls from consuming nations under the IEA.
Oil Jumps Over 10% as Russia-Ukraine Ceasefire Talks Fail
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