Oil Price Spikes to $139 on Talks About Russia Oil Ban, Iran Deal

Oil prices spiked to their highest levels since 2008 on Monday amid market supply fears as the United States and European allies considered banning Russian oil imports and prospects for a swift return of Iranian crude to global markets receded.

In the first few minutes of trade Brent crude reached $139.13 a barrel and U.S. West Texas Intermediate (WTI) hit $130.50, both benchmarks striking their highest since July 2008.

By 1204 GMT, prices had eased back, with Brent up 6.3% at $125.55 per and WTI up 6.7% at $123.37.

Global oil prices have spiked more than 60% since the start of 2022, along with other commodities, raising concerns about world economic growth and stagflation. China, the world's No. 2 economy, is already targeting slower growth of 5.5% this year.

U.S. Secretary of State Antony Blinken said on Sunday said the United States and European allies were exploring banning imports of Russian oil, while the White House was coordinating with Congressional committees to move forward with a U.S. ban.

"We consider $125 per barrel, our near-term forecast for Brent crude oil, as a soft cap for prices, although prices could rise even higher should disruptions worsen or continue for a longer period," UBS commodity analyst Giovanni Staunovo said.