Oil relentlessly marched higher beyond $110 a barrel on Wednesday, responding to a flood of divestment from Russian oil assets by major companies and expectations that the market will remain short on supply for months to come.

The market’s surge has been dramatic, with global benchmark Brent crude gaining 11 percent this week alone after Russia invaded Ukraine and the West responded with numerous sanctions designed to hammer Russia’s economy.

While the energy sector was not specifically targeted, the sanctions, which have targeted financial transactions and banks, have hampered exporting capabilities from Russia, which ships 4 million to 5 million barrels of oil worldwide every day, more than any nation except Saudi Arabia.

“The sanctions on individuals and financial institutions have led the oil industry and other government entities to a de facto ban on Russian oil purchases,” said Andrew Lipow, president of Lipow Oil Associates in Houston, Texas in the United States.

Global benchmarks were off earlier highs after Brent hit its highest level since 2014 while US crude surged to a peak not seen since 2011.

Brent crude futures peaked at $113.94 a barrel before easing to $110.58 by 1:07pm EST (17:07 GMT), up $5.61 or 5.3 percent. US West Texas Intermediate (WTI) crude futures hit a high of $112.51 a barrel, and were last up $5.05, or 4.9 percent, to $108.46.

Both benchmarks pulled back after US Federal Reserve Chair Jerome Powell said the US central bank would boost interest rates several times to quell inflation.

“Demand destruction – through still higher prices – is now likely the only sufficient rebalancing mechanism,” said Goldman Sachs analysts in a note.

Relief in the form of more supply is unlikely in the near term. The Organization of the Petroleum Exporting Countries and allies – which include Russia – stuck to its long-term plan to boost output by just 400,000 barrels per day (bpd) at a brief meeting on Wednesday.

Even as OPEC+ has increased output for the last several months, producers are routinely falling short of their targets, widening a gap that can only be filled by dipping into stockpiles.

Current worldwide demand has roughly reached levels last seen before the coronavirus pandemic, and there is inadequate supply, causing large countries to dip into their stockpiles to make up for the shortfall.

Refiners and other buyers of oil are scrambling. Prominent grades of crude oil traded worldwide, such as those in the North Sea and the Middle East, are at record premiums above Brent.

At the same time, the key Russian Urals grade is being discounted at $18 lower than the benchmark – and prospective sellers are still finding little interest in Russian oil. On Wednesday, Russia’s Surgutneftegas was unable to sell 880,000 tonnes of Urals oil from Russian ports, following cancellations of other proposed sales.

Adding fuel to the fire, the White House on Wednesday said it was “very open” to the possibility of targeting Russian oil and gas with sanctions. That could drive prices even higher, analysts said, until consumers start to balk at the rising costs.

However, National Economic Council Deputy Director Bharat Ramamurti later on Wednesday said the US administration does not want to target the Russian energy sector for now.

Russian oil exports account for about 8 percent of global supply.

Trade in Russian oil was already in disarray as producers postponed sales, importers rejected Russian ships and buyers worldwide searched elsewhere for crude while Western sanctions and pullouts by private companies squeezed Russia.

Numerous global oil majors announced plans to divest of their Russian investments, including ExxonMobil, BP and Shell. On Wednesday, merchant trader Trafigura said it had frozen its investments in Russia, one day after Exxon said it would exit Russian oil-and-gas operations.

US oil inventories continued to decline, meanwhile. The key Cushing, Oklahoma crude hub’s tanks are at their lowest since 2018, while the US strategic reserves dropped to a near 20-year low – and that was before another release announced by the White House on Tuesday in tandem with other industrialised nations.

That release of 60 million barrels of oil agreed on Tuesday by International Energy Agency member countries failed to reassure the market, as prices rose after the announcement.

“Given the 100 million bpd oil demand market, 60 million barrels satiates slightly over half a day of demand … and barely gets the market past lunchtime,” wrote RBC Capital Markets analyst Michael Tran.