(Bloomberg) -- Oil headed for the biggest weekly surge in almost two years after Russia’s invasion of Ukraine roiled global markets and fueled fears of a supply crunch, driving prices to their highest since 2008.
Futures in New York resumed gains Friday after swinging through a $10 range and closing below $108 a barrel in the previous session on signs that a Iranian nuclear deal may conclude soon. Prices are up 19% this week after Russia was slapped with financial sanctions, prompting buyers to shun its crude.
The International Energy Agency warned that global energy security was under threat and a planned release of emergency oil reserves by the U.S. and other major economies failed to quell supply concerns. JPMorgan Chase & Co. (NYSE:JPM) said global benchmark Brent crude could end the year at $185 a barrel if Russian supply continues to be disrupted. It was just shy of $120 on Thursday.
The invasion has reverberated throughout the energy sector. Global oil majors including BP (NYSE:BP) Plc, Shell (LON:RDSa) Plc and Exxon Mobil Corp (NYSE:XOM). are exiting Russia, buyers of its crude are seeking alternatives and shipping costs are spiking. Russia’s Lukoil PJSC has called for a “fast resolution of the military conflict.”
Russia hasn’t been slapped with official sanctions on its energy exports yet, with Germany opposing a ban on imports of Russian oil, gas and coal even as it underlines the urgency to reduce its reliance on Moscow. However, U.S. lawmaker support for an outright ban on imports into America is growing.
Against this backdrop, OPEC+ stuck with its gradual scheduled increase of supply in April during its monthly meeting on Wednesday, wrapping up the gathering in record time without discussing the invasion of Ukraine. Russia is one of the key leaders of the cartel along with Saudi Arabia.
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