Higher As Russian Energy Embargo Discussed

WTI is +$8.40 and Brent is $9.80 at writing, printing ~$124.10 and ~$127.90 respectively. Both benchmarks have backed away from fresh multi-year highs lodged earlier in the session ($130.50 for WTI and $139.13 for Brent), although worry re: Ukraine continues to mix with concerns over tightness in global crude supplies in ‘22.

• To recap, crude caught a strong bid in Asia as U.S. Secretary of State Blinken stated on Sunday that the U.S. and its European allies are discussing possible sanctions on Russian energy exports (estimated at ~5mn bpd in 2021). Reuters source reports have also suggested that European nations have recently become “more open” to a ban on Russian energy products, while the White House was also said to be working on plans for their own embargo.
• Elsewhere, indirect U.S-Iran nuclear talks have hit a potential roadblock, as Moscow demanded written guarantees over the weekend that western sanctions on Russia arising from its invasion of Ukraine, will not impede Russo-Iranian trade and collaboration. Positive developments in the IAEA’s nuclear investigation over the weekend (that would have removed one of the final hurdles to an Iranian nuclear deal) were largely overshadowed by the Russian demand, with Iranian officials quoted by RTRS as saying that “this move is not constructive for Vienna nuclear talks”.
• Finally, Libyan oil production has declined by ~330K bpd, following a militia-led occupation of some of the country’s oilfields (Sharara and El Feel).