Oil prices fell below $100 a barrel on Friday from $105 a day earlier as energy supplies from Russia escaped any direct US sanctions in the wake of the Russian invasion of Ukraine.
During the day, crude was trading between $ 98 and $ 102 per barrel in the international markets.
Russia launched an invasion of Ukraine on Thursday, sparking concerns that the war and the resulting economic sanctions by Western powers could disrupt energy supplies from Russia. This led to a jump in oil and gas prices.
But US sanctions targeting Russia’s financial institutions and arms industry left energy exports untouched, largely due to Europe’s heavy reliance on Russian oil and gas.
Asian liquefied natural gas (LNG) price benchmarks also rose on fears of supply disruptions. Higher prices in the spot market have already curtailed India’s LNG imports for months.
US President Joe Biden said the United States is working with other countries for a coordinated release of excess oil from its strategic petroleum reserves. These releases may have a limited and temporary effect on prices.
The oil market has been facing a supply crunch for months amid a pick-up in demand, which has pushed up prices. Prices have risen by almost 50% in three months. The recent increase has been driven by the Russia-Ukraine conflict.
The Organization of the Petroleum Exporting Countries (OPEC) and Russia-led allies have placed artificial restrictions on supplies. The group has been promising to add a small amount of supplies every month but many of its members are unable to meet their production targets. Shale producers in the US, or large companies such as BP and Shell, have focused on increasing shareholder returns rather than increasing capital expenditures to produce more oil.
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