On March 7, the price of international crude oil futures rose sharply, reaching a maximum of $139 in Brent crude oil, the highest level since 2008. The settlement price of the main contract of WTI crude oil futures in the United States was US $119.4/barrel, up US $3.72 or 3.2%; The settlement price of the main contract of Brent crude oil futures was US $123.21/barrel, up US $5.1 or 4.3%. The situation in Russia and Ukraine has further deteriorated, and the market is generally pessimistic about its third round of negotiations. The United States and the European Union consider banning the import of crude oil from Russia. At the same time, Iran’s oil is unlikely to return to the international market in the short term, and the supply interruption is expected to continue to push up the oil price.

As of the 7th, the third round of Russia Ukraine negotiations held in Belarus has ended. According to relevant media reports, the negotiations between the two sides have not achieved the expected results. The situation in Russia and Ukraine is still changing rapidly, and the prospect is full of great uncertainty, which also greatly magnifies the expectation of interruption of crude oil supply.

More importantly, the US and EU sanctions against Russia are still escalated. U.S. Secretary of state Blinken said recently that the United States is working with the European Union to study the possibility of prohibiting the import of Russian oil. Prior to this, the United States and its European allies imposed a series of sanctions on Russia. Although they also sacrificed the trump card of “swift” financial sanctions, they did not prohibit oil and gas transactions with Russia. The news further spread the panic caused by the market. The oil market shook on Monday. During the Asian trading session, the price of Brent crude oil futures in London once hit a high of US $139.13/barrel.

Judging from the current market reaction, the sanctions have had a real impact on the crude oil supply side. At present, Russia’s energy supply has begun to decline. Under the panic, some buyers dare not sell, the freight rates rise sharply, and it is difficult to find oil ships, which also brings difficulties to buyers. The current situation leads to a large discount on ural crude oil. According to statistics, the daily supply of crude oil in Russia is about 10 million barrels, of which the export volume is about 4-5 million barrels / day, and the daily export of refined oil is nearly 3 million barrels / day. If the sanctions further rise to the energy embargo, it will have a serious impact on the global oil supply.

Crude oil analysts of business news agency believe that the current situation in Russia and Ukraine is still a key factor affecting oil prices. Changes in the situation and the escalation of sanctions will exacerbate the volatility of oil prices. Although the current market supply expectation is pessimistic, the oil producing country OPEC + has stated that it will not increase additional production. Although the Iranian nuclear negotiations have made progress, the return of Iranian oil to the international market will not happen overnight, and the supply expectation will form a strong support for oil prices. However, at present, the response of oil prices has gradually deviated from the fundamentals, and the risk premium has risen sharply. At the same time, soaring oil prices bring high costs, which will seriously harm future demand and further lead to the fragility of the industrial chain. The market should beware of the arrival of vicious market.