Crude oil futures price tops record on Russian disruption

Wednesday, July 28, 2004 | 9:40 a.m.

NEW YORK -- Crude oil futures rose 2.9 percent to a record $43.05 a barrel for September delivery today after Yukos Oil Co., Russia's biggest oil exporter, said the government ordered a halt to production from its main Siberian unit.

The order forbids units from selling property, in effect banning oil sales and forcing a stop in output, Yukos lawyer Dmitry Gololobov said. Russia is seeking to recover $3.4 billion in back taxes and fines.

"This is detrimental to the long-term supply outlook," said Kyle Cooper, an analyst with Citigroup Inc. in Houston. "It will become much harder to attract foreign investment in the Russian oil industry. Any investor in the future will demand much higher returns to make such a risky venture."

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