Yahoo Finance Brent crude swings back above $100 on tight supply concerns
Crude prices returned to above $100 (£76.82) after the Organisation of Petroleum Exporting Countries (OPEC) warned it would be impossible to offset future and current sanctions on Russian oil.
OPEC said that some 7 million barrels per day of Russian crude and other liquids exports could be lost due to embargoes or voluntary actions.
Tuesday's rise also follows Shanghai partially relaxing Omicron restrictions, lifting some of the downward pressure stemming from concerns about Chinese oil demand.
On Monday, some ministers said that the European Union was drafting plans for an EU oil embargo on the Kremlin in the wake of its invasion of Ukraine.
The EU met with the OPEC amid pressure on the bloc to impose a ban on Russian oil over Kremlin atrocities in the Ukraine conflict. The trade block, which banned Russian coal imports worth €4bn ($4,4bn, £3.3bn) per year, relies on Russia for around 25% of its crude imports.
Benchmark Brent crude (BZ=F) rose 4.4% to $102.79 a barrel. US light crude (CL=F) was 3.8% higher to $97.95 in electronic trading on the New York Mercantile Exchange at the time of writing.
Susannah Streeter, senior investment and markets analyst at Hargreaves Lansdown, said: "With the sanctions screw expected to be turned tighter on Russia, with the EU thought to be inching closer towards agreeing a Russian oil embargo, Brent crude has crept back up to above $100 a barrel, after yesterday’s losses.
"Supply concerns show little signs of evaporating despite the emergency release from stockpiles around the world and prices are set to stay elevated with OPEC warning that it will be nigh on impossible to replace 7 million barrels per day of crude and other products from Russia as many firms continue to shun its exports and if fresh sanctions are imposed."
OPEC secretary-general Mohammad Barkindo said the "highly volatile market" was due to political factors rather than supply and demand fundamentals of the oil market.
"These are non-fundamental factors that are totally out of our control at OPEC," he said. "Considering the current demand outlook, it would be nearly impossible to replace a loss in volumes of this magnitude."
Meanwhile, Saudi Arabia, the world's top oil exporter, said that OPEC+, which includes OPEC and other major producers like Russia, will leave politics out of its decision-making.
"That culture is seeped into OPEC+, so when we get into that OPEC meeting room, or OPEC building, everybody leaves his politics at the outside door of that building, and that culture has been with us," the country's energy minister Prince Abdulaziz bin Salman said.
OPEC+ said it will stick to modest oil output rises, resisting industry pressure to pump more crude to fill supply gaps, and add 432,000 barrels of oil per-day to the market from May.
Read more: FTSE plunges as UK labour market strain sparks stagflation fears
It comes as the International Energy Agency (IEA) announced it will deploy 60 million barrels from its stockpiles in a bid to help calm the market.
That's on top of the 180 million barrel release already announced by US president Joe Biden last month.
The US will deliver the barrels in the next six months from its Strategic Petroleum Reserve, releasing around one million barrels will be released per day, draining nearly a third from its emergency reserves.
Oil giants BP (BP.L) and rival Shell (SHEL.L) shares were 2.8% and 1.4% higher respectively after the benchmark Brent price returned above $100 a barrel.
