U.S. considers banning exports of Russian crude

International oil prices skyrocketed to 140 U.S. dollars per barrel as Washington considers ban on Russian crude amid likelihood of prolonged Russian invasion of Ukraine.

According to the London ICE future exchange as of Sunday (local time), the price of Brent crude rose 18% as the market opened, the largest increase in market history. The price of WTI traded on the New York Mercantile Exchange increased to 130.50 dollars. The prices of both crude were the highest in 13 years and eight months since July 2008.

“We are actively considering with our allies in Europe on banning Russian crude,” said U.S. Secretary of State Tony Blinken who is visiting Europe. “The issue has been discussed with President Jo Biden yesterday.”

A ban on Russian oil exports is the final and strongest sanction posable by Western countries. The sanction is expected to bring damage to the Russian economy, but banning Russian crude, which accounts for 7% of the world’s supply, will inevitably worsen inflation and impact to the global economy.

The global financial market fell into panic out of fears of an oil shock equivalent to the 1970s. Experts say that the world could be on the brink of an energy crisis rivaling the 1970s


Min-Woo Park minwoo@donga.com