Oil falls 5% on speculation U.S. Russia oil ban won't add to supply shock | Reuters

Oil falls 5% on speculation U.S. Russia oil ban won't add to supply shock | Reuters

Oil fell over 5% to around $121 a barrel on Wednesday as some investors took the view that the U.S. ban on Russian oil may not worsen a supply shock and the head of the International Energy Agency said the agency could further tap oil stocks.

U.S. President Joe Biden on Tuesday imposed an immediate ban on Russian oil. read more Talk that Ukraine was no longer seeking NATO membership after some news reports this week on the issue also weighed on prices, traders said. read more

"Maybe this is playing its part," said Tamas Varga of oil broker PVM of the Ukraine NATO membership issue.

"The realization that the U.S. import ban might not materially make the current supply shock worse than it has been might have also triggered this bout of profit-taking," he added.

Brent crude was down $6.96, or 5.4%, at $121.02 a barrel at 1430 GMT, after earlier falling to as low as $120.04. U.S. West Texas Intermediate (WTI) fell $6.56, or 5.3%, to $117.14.