Oil Surpasses $112 as Ukraine Conflict Provokes Iran

Indications of an escalation in the Russia-Ukraine conflict, with reports of a fire at a Ukrainian nuclear power plant, scared markets before authorities said the fire in a building recognized as a training center had been extinguished.

Brent crude climbed as high as $114.23 a barrel; by 1050 GMT, it was up $1.97, or 1.8%, at $112.43. U.S. West Texas Intermediate (WTI) added $2.21, or 2.1%, to $109.88 behind touching a high of $112.84.

Crude oil hit its most elevated in a decade this week; prices should post their most substantial weekly gains after the middle of 2020, with the U.S. benchmark up more than 18% and Brent 13%.

On Thursday, prices turned in a $10 range. Still, they settled more down for the first time in four sessions; investors had their focus on the resurrection of the Iran nuclear deal; it should increase Iranian oil exports and ease tight supplies.

Rising Fears Over Sanctions

Nevertheless, Iran’s Foreign Minister Hossein Amirabdollahian stated on Friday that the West’s hustle to reach a nuclear agreement could not prevent the compliance of Iran’s red lines, including economic guarantees.

Oil prices are growing on worries that Western sanctions over the Ukraine conflict will disrupt Russia’s cargo, the world’s largest exporter of crude and oil products combined.

Buyers hesitate to make purchases because of sanctions versus Russia. Hence, trading activity for Russian crude has been delayed. At the same time, U.S. President Joe Biden comes under increasing pressure to ban U.S. imports of Russian oil.

More oil supplies should be counted from a coordinated release of 60 million barrels of oil reserves by developed nations, compromised this week. Japan said on Friday that it intends to release 7.5 million barrels of oil.