SULAIMANI (ESTA) — Oil prices surged, with Brent breaching $100 a barrel for the first time since 2014 on Thursday as Russia attacked Ukraine, exacerbating concerns that a war in Europe could disrupt global energy supplies.
After Russian President Vladimir Putin authorized what he called a special military operation, Ukraine’s Foreign Minister Dmytro Kuleba said in a tweet that Russia had launched a full-scale invasion of Ukraine and was targeting cities with weapons strikes.
Brent crude hit a high of $103.10 a barrel, the loftiest since September 2014, and was at $101.52 a barrel at 0631 GMT, up $4.68.
U.S. West Texas Intermediate (WTI) crude futures jumped $4.15 to $96.25 a barrel, after rising to as much as $97.40, the highest since August 2014.
Oil prices have surged more than $20 a barrel since the start of 2022 on fears that the United States and Europe would impose sanctions on Russia’s energy sector, disrupting supplies.
Russia is the world’s second-largest oil producer, mainly selling its crude to European refineries, and is the largest supplier of natural gas to Europe, providing about 35% of the latter’s supply.
“Russia’s announcement of a special military operation into Ukraine has pushed Brent to the $100/bbl mark,” said Warren Patterson, head of ING’s commodity research.
“This growing uncertainty during a time when the oil market is already tight does leave it vulnerable, and so prices are likely to remain volatile and elevated,” he added.
Western nations and Japan on Tuesday punished Russia with new sanctions for ordering troops into separatist regions of eastern Ukraine, and threatened to go further if Moscow launched an all-out invasion of its neighbour. So far, there are no sanctions on energy trade.
“It’s not just geopolitical risk that is the problem but the further straining of supply,” OCBC economist Howie Lee said.
“Russian oil supply will disappear overnight if faced with sanctions … and OPEC can’t produce fast enough to cover this gaping hole.”
(Esta Media Network/Reuters)
