Oil prices were rising on Tuesday sparked by renewed supply fears as the G7 group of nations discussed a price cap on Russian crude imports.
The front-month contract for Brent crude North Sea oil was last seen up USD 1.27 at USD 116.36/bbl, while the WTI equivalent was USD 1.07 higher at USD 110.64/bbl.
“Crude oil prices rose on a renewed supply worries as the G7 members consider further limiting Russia’s oil export[s],” said Tina Teng of CMC Markets in a note.
On Monday, officials at the G7 summit concluded that the plan was to curb Russia’s revenues from hydrocarbons, while minimising the negative impact of high energy prices, the Financial Times reported.
According to a draft text seen by the FT, leaders would explore the “feasibility” of a temporary price cap on the imports of the likes of oil and gas.
The group also discussed attempts to promote greater global production in a bid to wean itself off Russian supplies and tackle high prices, though conceded a “great deal of work” needed to be done.
However, representatives at the summit also accepted an “output increase by producers may not be sufficient to counter the loss of Russian barrels”, said analysts at Phillip Nova in a note.
“[Members] discussed the prospects of reviving a nuclear deal with Iran to counter the geopolitical crisis caused by sanction[s] on Russian oil.”
The US was currently sanctioning Iranian energy supplies due to its nascent nuclear programme.