Oil extended its retreat from a seven-year high after the US reiterated its decision not to sanction Russian energy exports after it invaded Ukraine.
West Texas Intermediate (WTI) for March delivery closed down 1.31 percent at US$91.59 a barrel on Friday. WTI was up 0.57 percent from a week earlier.
Brent crude for April delivery on Friday fell 1.16 percent to US$97.93 a barrel, up 4.69 percent weekly.
Photo: AFP
The pullback came after the US Department of State said that it would not sanction Russian crude oil because that would harm US consumers and not Russian President Vladimir Putin.
At the same time, the International Energy Agency pledged to help ensure global energy security in amid the crisis.
“It seems that the US and its allies want to inflict pain on Russia, but do not want to impede their ability to deliver energy products to the world,” said Bart Melek, head of commodity strategy at TD Securities.
On Thursday, oil surged to US$100 as Russia launched an attack on its neighbor, although prices subsequently retreated as it emerged that Western governments would not impose sanctions on energy exports.
Still, buyers such as China have briefly paused purchases of Russia’s flagship Urals grade on concern that the rupture in international relations might still complicate dealings with Moscow.
Urals grade is now being offered at a discount of US$11.60 a barrel below Dated Brent, the deepest discount in 11 years of data compiled by Bloomberg.
Merchant ships carrying crude oil in the Black Sea have also been thrown into the invasion turmoil.
Meanwhile, insurers are either not offering to cover vessels, or they are demanding huge premiums to do so.
US President Joe Biden imposed Washington’s toughest-ever sanctions on Russia as tanks and troops moved closer to the Ukrainian capital, but said restrictions on currency clearing would include carve-outs for energy payments, a crucial source of revenue for Moscow.
In addition, the US said it plans on joining the EU and UK in planning to sanction Putin himself over the invasion of Ukraine, a person familiar with the announcement said.
Additional reporting by staff writer
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