Title: Oil climbs on supply concerns as Iran talks stall
Apr 04, 2022 03:55AM ET
Oil prices gained about $1 on Monday as concerns persisted over tight supplies after Germany warned of further sanctions on Russia and talks to revive a deal on Iran's nuclear program were suspended.
By 03:28 AM ET, Brent crude futures were up 94 cents, or 0.9%, at $105.33 a barrel, while U.S. West Texas Intermediate crude was up 92 cents, or 0.9%, at $100.19.
Both contracts fell $1 at Monday's market open, but rebounded from lows after Iran accused the United States of suspending talks aimed at reviving its 2015 nuclear deal that would have allowed sanctions on Iranian oil supplies to be lifted.
That has heightened fears of supply constraints. Russian oil and oil product exports have been hit by Western sanctions and buyer aversion following Russia's invasion of Ukraine.
Germany said on Sunday that the West would agree to impose further sanctions on Russia in the coming days after Ukraine accused Russian forces of war crimes near Kiev. Russia has rejected the war crimes allegations as part of a so-called special military operation aimed at demilitarising Ukraine.
Estimates of Russia's oil supply losses range from 1 to 3 million barrels per day (bpd), further straining global markets already struggling with low inventories.
Oil prices plunged by around 13% last week after US President Joe Biden announced that up to 1 million barrels of oil per day would be sold from the US Strategic Petroleum Reserve (SPR) for six months starting in May. Biden said the release, the third in six months, will serve as a bridge period until domestic producers increase production and balance supply and demand.
The U.S. Department of Energy officially outlined the sale of oil from emergency reserves, while members of the International Energy Agency (IEA) also agreed on Friday to release more oil. According to the IEA, the volume will be made public this week.