A general view of oil tanks in the Transneft-Kozmino Port near the far eastern town of Nakhodka, Russia.
Yuri Maltsev | Reuters
Oil prices dropped in a sudden move on Wednesday, giving back some of the rally this month amid supply disruptions stemming from Russia’s invasion of Ukraine.
WTI crude oil tumbled more than 13% to trade at $108 per barrel, on track for its worst day since April 2020. Earlier this week, WTI topped $130 per barrel briefly — a 13-year high — during escalated geopolitical tensions.
Brent crude oil, the international benchmark, fell a similar 12% to $112, headed for its biggest one-day drop since November. Brent hit $139 on Monday, its highest since 2008.
The move in oil lower came amid indications of possible progress by the U.S. in encouraging more oil production from other sources. Reuters reported that Iraq said it could increase output if OPEC+ asks. Secretary of State Antony Blinken also signaled that UAE would support increased production by OPEC+.
“The world is working together to tackle surging oil prices and that has put a short-term top for crude,” Ed Moya, senior market analyst at Oanda, said in a note.
Last week, the International Energy Agency released 60 million barrels of oil reserves to compensate for supply disruptions following Russia’s invasion, and the agency called the move “an initial response” and said more could be released if needed.
Still, oil prices have surged this month with WTI crude oil up 15% as Russia, the world’s second-largest crude exporter, invaded Ukraine.
The United Kingdom announced its own restrictions on buying Russian oil imports, saying it will phase out the country’s imports by the end of the year. The European Union also unveiled a plan to wean itself off of Russian fossil fuels.
