Oil prices jumped to their highs of the session Tuesday as President Joe Biden announced a ban on Russian fossil imports including oil in response to the country's invasion of Ukraine.
WTI crude oil popped as much as 7% to trade above $128 per barrel. It ended the day 3.6% higher at $123.70. Brent crude oil, the international benchmark, jumped 7.7% to $132.75, before trading off the highs. At the end of the session the contract stood 4.3% higher at $123.21.
"We made this decision in close consultation with our allies and partners around the world, particularly in Europe," Biden said in a press conference. "We are working closely with Europe and our partners to develop long term strategy to reduce their dependence on Russia."
In 2021, the U.S. imported about 672,000 barrels per day of oil and refined products from Russia, or about 8% of total imports, according to Andrew Lipow, president of Lipow Oil Associates, based on data from the Energy Information Administration.
Earlier, the United Kingdom announced its own restrictions on buying Russian oil imports just before Biden spoke, saying it will phase out the country's imports by the end of the year. The European Union also unveiled a plan to wean itself off of Russian fossil fuels.
John Kilduff, founding partner of Again Capital, said oil took a second run at $130 and failed, which induced some selling.
"Everybody was wondering with Biden announcing the sanctions — was it going to be a buy the rumor, sell the news moment," Kilduff said. "The finality of Biden announcing that solidified the sell news moment. Now we know where we stand."
The market has already been self-sanctioning the Russian energy complex, with buyers avoiding the nation's oil.
"Estimates vary, but it is probably fair to say that should an import ban be imposed on Russia the additional volume that becomes unavailable would be relatively limited," said Tamas Varga at brokerage PVM.
"The de facto ban on Russian crude oil imports is here with or without government legislation," Lipow added.
Prices at the pump surge
Americans are now paying the most at the pump on record as energy prices surge, contributing to rampant inflation that's hitting all areas of the economy.
The national average for a gallon of regular gas rose to $4.173 on Tuesday, according to AAA.
The prior record was $4.114 from July 2008, not adjusted for inflation.
Tuesday's new high follows a sharp spike in gas since Russia invaded Ukraine, sending oil prices surging.
Consumers are paying 55 cents more than one week ago, and about 72 cents more than last month.
Experts expect oil prices — and therefore prices at the pump — to remain elevated.
"Unless something drastic happens, we are headed for average pump prices in the $4.50-$4.75 gallon range for motor fuel and beyond $5 gal for diesel," said Tom Kloza, head of global energy analysis at Oil Price Information Services.
Oil prices, meantime, jumped Sunday to prices last seen in 2008.
West Texas Intermediate crude futures, the U.S. oil benchmark, traded as high as $132.07. International benchmark Brent crude hit $139.13. But both settled well below those highs during Monday's trading session.
Russia is a key oil and gas producer and exporter, and the country's war on Ukraine is disrupting the global market.
"Given Russia's key role in global energy supply, the global economy could soon be faced with one of the largest energy supply shocks ever," Goldman Sachs said Monday in a note to clients.
— CNBC's Patti Domm and Yun Li contributed reporting.