Yahoo Finance Oil retreats after factoring in 'worst case scenario' following Ukraine invasion
Oil backed off its session highs after President Biden indicated petroleum reserves could be tapped as needed and sanctions from Western countries avoided targeting Russian supplies .
Sanctions from world leaders were closely monitored by analysts after Russia invaded Ukraine, sending oil surging on Thursday morning.
"Oil and gas supplies from Russia as of now have not been affected at all," Vanda Hari, founder of Vanda Insights, told Yahoo Finance Live this morning.
"Will Russian oil and gas supplies to Europe and perhaps even to the rest of the world be affected? And until that is clear, you can't say crude has topped out, no matter where it reaches," she added.
Brent (BZ=F) crude futures briefly surpassed $105 per barrel while U.S. West Texas Intermediate (CL=F) touched $100 hours following Russia's invasion of Ukraine.
"What is happening is the market now is factoring in the worst-case scenario — and we're are not there yet. The worst-case scenario would be a complete cut off of Russian gas an oil cut off the rest of the world," said Hari.
"It would be absolute chaos, mayhem, because there is not a way all the oil and gas producers in the world put together ... could replace ... could plug that gap, if indeed Russian oil and gas supplies to the world get blocked off."
Nearly 45% of gas imports in Europe come from Russia. The vast majority of those are via pipelines.
This afternoon, Biden didn't mention sanctions directly against Russia's energy sector when he spoke to reporters. But West Texas Intermediate crude futures came off their session highs after indicating the U.S. could tap its reserves.
"I will do everything in my power to limit the pain that American people feel at the gas pump," said Biden.
“American oil and gas companies should not, should not, exploit this moment or raise prices,” he added.
The president said the U.S. will release additional oil from its reserves as conditions warrant.
Brent futures settled at $99.08, while WTI closed at $92.81 per barrel.
Ines is a markets reporter covering stocks from the floor of the New York Stock Exchange. Follow her on Twitter at @ines_ferre
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