Oil rises toward $120 thanks to supply worries after Biden hints at tougher Russian energy sanctions and OPEC+ sticks with output plan

• Oil prices soared toward $120 a barrel Thursday after Joe Biden hinted he's open to imposing sanctions on Russian energy.
• The White House hasn't yet thrust sweeping sanctions on Russian oil and gas as that "would raise prices at the gas pump for Americans."

Oil prices surged to near $120 a barrel Thursday after President Joe Biden indicated sanctions on Russian oil exports are still a possibility, and after OPEC+ decided not to step up output despite the threat of a supply shock.

Brent crude futures were trading around $116.82 a barrel as of 4:15 a.m. ET, after hitting their highest level since 2013 at as much as $118.41 earlier in the session. West Texas Intermediate rose 3.3% to $114.31 a barrel, after hitting $115.34.

Gasoil soared by 14% Thursday to $1,190 per ton, making the commodity more expensive than at any time since July 2008.

The US on Wednesday hit oil refiners in Russia and its ally Belarus with new export checks on technology used in the sector. The export control measures are aimed at limiting the materials Russia needs to support its military aggression against Ukraine, including by preventing their diversion via Belarus.

Asked Wednesday whether the US would ban oil and gas imports from Russia after its invasion of Ukraine, Biden said "nothing is off the table."

But his administration played down any immediate move on sweeping Russian energy sanctions, given tougher measures on the second-largest oil producer in the world would likely raise gas prices for US consumers.

"Going after Russian oil and gas at this point would have an effect on US consumers and actually could be counterproductive in terms of raising the price of oil and gas internationally, which could mean more profits for the Russian oil industry," the National Economic Council's deputy director, Bharat Ramamurti, told MSNBC.

"So we don't want to go there right now."

Even without direct sanctions, more Western oil companies are announcing their withdrawal from Russia and a number of shipping companies are no longer accepting transport contracts from or to the country, Commerzbank said.

"Brent crude is now in shouting distance of my initial $120 a barrel target, and with markets unable to magically replace 5 million bpd of Russian oil exports, it seems when and not if it will hit this level," Jeffrey Halley, senior market analyst for Oanda, said in a note. "WTI could also potentially move to $120 in the sessions ahead."

Halley believes a bigger part of the squeeze on supplies is due to OPEC and its allies — known as OPEC+ — showing no interest in ramping up production.

On Wednesday, those major oil producing countries agreed in a meeting lasting just 13 minutes to hold to their plan to add 400,000 barrels of crude oil production in April.

They effectively ignored the war in eastern Europe by avoiding discussion about Ukraine's invasion, analysts at Commerzbank said.

"Instead, reference was made to a balanced oil market and to geopolitical developments that are generating volatility," they added.

The US has indicated it would like to see the group raise output more quickly, but OPEC's decision snubs those calls to pump more, a move that could reduce prices.

"This modest increase may also signal that OPEC+ isn't as concerned with higher prices as others may be, and could just be willing to stick with its original plan all the way through given that prices have already broached $100," Rohan Reddy, director of research at Global X ETFs, said.

Oil broke the $110 level Wednesday, hitting highs unseen in 8 years, over the potential of big disruptions to Russian oil supplies from sanctions.

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