The West Texas Intermediate (NYSE: USO) benchmark for American oil fell 6% to $103 per barrel after trading opened on Monday. At the same time, Brent crude, the international benchmark for oil, fell roughly 5%, bringing the cost down to $107 per barrel. However, that's still far higher than the $65 price tag seen in December 2021, prior to Russian President Vladimir Putin's invasion of Ukraine.
Russia, the world's second-largest exporter of crude oil, has effectively been barred from the global energy market. While the U.S. only sources about 10% of its oil supply from Russia, other countries like the U.K. are heavily reliant on Russian crude for energy. These more reliant countries have announced plans to move away from Russian energy, and the U.S. has banned the import of Russian natural gas and coal.
On March 1, following the invasion, Brent rocketed up to its highest price point since 2014, $113.58 per barrel. About a week later, WTI reached its highest point in more than thirteen years, briefly topping $130 per barrel.
Just a few days later on March 9, however, oil prices saw their largest decrease since November 2021, with WTI dropping 12% to $108.7 and Brent falling 13%. to $111.1. Monday's dip has compounded the losses.
The decreases came following announcements from members and allies of the Organization of the Petroleum Exporting Countries (OPEC+). Iraq and the United Arab Emirates (UAE) have both stated they would be open to supporting increased oil production if OPEC+ decides to pursue this plan.
"That $130 price point was factoring in the absolute siege mentality in the oil market, where we were staring down potentially losing all Russian output, OPEC not budging and the Ukraine situation just worsening," Again Capital's John Kilduff told CNBC. "Now we've reversed all of that, seemingly, to a degree at least. I don't want to get ahead of myself."
While oil benchmarks may have dipped, the price at the pump hasn't seen the effects. According to AAA, on Monday, the average price of a gallon of gas was $4.325. This is up from the $4.009 average the week prior, the highest gas prices since 2008.