Oil hits 10-year high at $120 as supply tightens

London, March 3

Benchmark Brent crude oil prices climbed close to $120 a barrel on Thursday, with Russian oil exports disrupted as traders try to avoid becoming entangled in sanctions.

Support also came from US crude stockpiles at multi-year lows, helping to lift Brent crude futures as high as $119.84 a barrel for the highest level since 2012. By 1024 GMT the contract was up $2.18, or 1.9%, at $115.11 a barrel.

Brent has jumped by about 37% in the past 30 days and the contract's six-month spread hit a record high on Thursday at more than $21 a barrel, indicating very tight supplies.

US West Texas Intermediate crude hit a high of $116.57, its loftiest since 2008, before retreating a little to $113.12, up $2.52 or 2.3%.

The gains followed a fresh round of US sanctions that target Russia's oil refining sector, raising concerns that Russian oil and gas exports could be targeted next.

Russia competes with Saudi Arabia for the title of biggest crude oil and refined oil products exporter, with shipments of more than 7 million barrels per day (bpd), about half of which go to Europe.

While wielding economic sanctions to try to make Russia call off its invasion of Ukraine, Washington has so far stopped short of targeting Russia's oil and gas exports, weighing the impact on global oil markets and US energy prices. — Reuters