Oil prices rose for the fourth day in a row as concerns over Russian supply disruptions outweighed expectations of reduced demand in China.
Brent Crude climbed 1.7% to $109.40 a barrel, while WTI Crude rose 1.03% to $106.50 a barrel.
Both contracts are set to end this week and post their fifth consecutive monthly gains, supported by reports that the European Union (EU) will phase out imports of Russian oil by the end of the year.
Germany – the bloc’s biggest economy – dropped its opposition to the measure, which is being considered for inclusion in the EU’s sixth sanctions package against Russia after it invaded Ukraine in February.
Prices were volatile over the next two months, peaking at 14-year highs of $139 a barrel in early March before falling below $100 later in the month as developed economies faltered. grappling with the prospect of supply shortages.
The US and UK’s choice to impose sanctions on Russian energy supplies has caused prices to soar, exacerbated by tight markets amid OPEC+’s continued failure to increase production in line with its promised modest increases of an additional 400,000 barrels per day.
As calls from the West for increased supplies fell on deaf ears, the United States and members of the International Energy Agency (IEA) opted to flood the market with 240 million barrels – causing prices to plummet as President Joe Biden desperately seeks to contain the cost of -life crisis ahead of the major midterm elections this year.
The latest resurgence in both major benchmarks has been weighed down by continued Covid-19 lockdowns in China, the world’s largest rough importer.
The country has shown no signs of easing lockdown measures in Shanghai, despite the impact on its economy and global supply chains.
However, prices are expected to remain high regardless as fears of supply shortages continue to escalate.
Russian oil production could fall by 17% this year, according to documents seen by the Reuters news agency, as Western sanctions hurt investment and exports.
Reflecting this reality, Exxon Mobil revealed earlier this week that Russian unit Exxon Neftegas has declared force majeure for its Sakhalin-1 operations.
The Sakhalin-1 project produces Sokol crude oil off the coast of Sakhalin Island in the Russian Far East, exporting around 273,000 barrels per day, mainly to South Korea, alongside Japan, the Australia, Thailand and the United States.
The energy giant revealed last month that it would shed about $4 billion in assets and cease all operations in Russia, including Sakhalin 1.
Meanwhile, OPEC+ is expected to stick to its existing deal and agree another small production increase for June at its May 5 meeting.