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Benchmark Brent crude futures for May climbed $3.56, or 2.9%, to
$126.77 a barrel at 11:03 GMT.
U.S. West Texas Intermediate (WTI) crude futures for April
delivery rose $3.12, or 2.6%, to $122.52 a barrel.
Prices were supported after sources told Reuters the United
States, the world's biggest oil consumer, may ban Russian oil
imports in the wake of Russia's invasion of Ukraine on Feb. 24.
The U.S. is willing to take this step without the involvement of
European allies, the sources said.
British oil major Shell said on Tuesday it plans to withdraw
from Russian oil and gas and stop all spot purchases of Russian
crude oil as a first immediate step.
Oil prices could climb to over $300 dollars per barrel if the
U.S. and European Union ban imports of oil from Russia, Deputy
Prime Minister Alexander Novak said on Monday.
Fears that Russia would respond to sanctions already imposed by
halting energy exports pushed prices higher.
Goldman Sachs hiked its Brent price forecast for 2022 to $135
per barrel from $98, and its 2023 outlook to $115 a barrel from
$105, reasoning that the world economy could face the "largest
energy supply shocks ever", given Russia's key role.
An apparent slowdown in talks with Iran over its nuclear
programme, which would end sanctions against its oil sales,
added further price support. The European Union envoy in the
talks said it was up to Iran and the U.S. to make political
decisions to reach a deal.
Furthermore, Iranian oil could take months to flow after a
nuclear deal.
Even if Iran alleviates current supply tightness with crude from
floating storage, "the drop in free spare capacity and strategic
oil reserves would likely keep energy investors uneasy and
prices at elevated levels," Swiss bank UBS said on Tuesday.
Oil supply disruptions come as inventories continue to fall
worldwide. Five analysts polled by Reuters estimated on average
that U.S. crude stockpiles decreased by about 800,000 barrels in
the week to March 4.
The poll was conducted ahead of weekly inventory reports from
the American Petroleum Institute, an industry group, on Tuesday
and the U.S. Energy Information Administration on Wednesday.
(Additional reporting by Sonali Paul and Mohi Narayan in New
Delhi; Editing by Bernadette Baum)
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