(LONDON) Both oil benchmarks jumped around 6% above $100 a barrel on Thursday, pushed by the war in Ukraine as the Kremlin refused to suspend its offensive and the IEA feared a shock to the oil supply.
Around 8:20 a.m., a barrel of Brent from the North Sea for delivery in May climbed 6.02% to 103.92 dollars.
A barrel of West Texas Intermediate (WTI) for April delivery rose back above the $100 mark, gaining 5.77% to $100.52 a barrel.
The Kremlin on Thursday rejected the decision of the International Court of Justice (ICJ), the highest court of the UN, which the day before ordered Russia to immediately suspend its military operations in Ukraine.
The head of French diplomacy Jean-Yves Le Drian accused Russia of “pretending to negotiate” a ceasefire while continuing to “make arms speak”.
Ukraine on Thursday accused Russia of bombing a theater in which “more than a thousand” civilians had taken refuge.
“The world must finally admit that Russia has become a terrorist state,” Ukrainian President Volodymyr Zelensky said on Wednesday evening.
“The ongoing attacks in Ukraine and the Kremlin’s rejection of reports of substantial progress in the talks” sound like “a real setback,” said Oanda analyst Craig Erlam.
Despite market volatility, “nervousness over signs of escalation is still a floor, with the geopolitical risk premium still priced in” into black gold prices, “although less than last week” , also explains to AFP, Victoria Scholar, analyst at Interactive Investor.
“The Russian invasion continues to dictate price action to some extent, given its global importance in terms of supply,” she continues.
Russia is the world’s second largest exporter of crude oil.
“Fears about possible supply disruptions have therefore been rekindled, as the longer the war drags on, the more we could see new sanctions against the Russian energy sector,” Fawad Razaqzada, an analyst for ThinkMarkets, told AFP.
The offensive and the determination of the two camps did not prevent the continuation of parallel talks, relaunched Monday by videoconference.
Black gold prices were also boosted by the monthly report of the International Energy Agency (IEA), which fears a “shock” on world oil supply, following the sanctions against Russia taken after his invasion of Ukraine.
This “harsh assessment” by the IEA “has raised new concerns about supply, which has added upward pressure on prices today”, continues Victoria Scholar, with the IEA predicting an even more tense.
The report is all the more “scathing” as “undersupply” is already observed on the market, says Craig Erlam to AFP. What compensate “largely any drop in demand due to high prices. »
“The IEA has also revised downwards its forecast for oil demand for the second quarter,” tempers Carsten Fritsch, an analyst at Commerzbank. “But the downward adjustment is not as pronounced as the supply adjustment,” he confirms.