Oil above $100 for the primary time since 2014 after Russia attacked Ukraine

© Reuters. FILE PHOTO: Crude oil storage tanks are seen from above on the Cushing Oil Hub in Cushing, Oklahoma, March 24, 2016. Reuters / Nick Oxford / file picture

by Emily Chow and Florence Tanno

BEIJING (Reuters) – Oil costs jumped on Thursday with Brent breaching $100 a barrel for the primary time since 2014 after Russia invaded Ukraine, elevating issues {that a} battle in Europe might be unleashed on world vitality. might interrupt the provision.

After Russian President Vladimir Putin licensed what he referred to as a particular army operation, Ukraine’s Overseas Minister Dmitro Kuleba mentioned in a tweet that Russia had launched a full-scale invasion of Ukraine and attacked cities with weapons assaults. was aiming.

Ukraine mentioned that Russia is shifting army gear from Crimea into the nation and is consistently dealing with cyber assaults. It reported one loss of life up to now.

Russia is the world’s second largest oil producer, primarily promoting its crude to European refineries, and Europe’s largest supplier, offering about 35% of its provide.

Brent crude rose to $103.78 a barrel, its highest degree since August 14, 2014, and was at $103.18 a barrel at 0830 GMT, up $6.34, or 6.5%.

US West Texas Intermediate (WTI) crude futures jumped $5.48, or 6%, to $97.58 a barrel, reaching $98.46, the very best degree since August 11, 2014.

Oil costs have risen by greater than $20 a barrel because the starting of 2022 on fears that america and Europe would impose sanctions on Russia’s vitality sector, disrupting provides.

Underscoring provide issues, subsequent month’s Brent premium for the second quarter rose 75 cents to $3.54 a barrel, the very best since 2011.

“At a time when the oil market is already tight, this increasing uncertainty makes it vulnerable, and therefore prices are likely to remain volatile and higher,” mentioned Warren Patterson, ING’s head of commodity analysis.

Graphic – Russia-Ukraine tensions high $100/barrel for the primary time since September 2014


Whereas there are not any restrictions on vitality commerce but, Western nations and Japan punished Russia on Tuesday with new sanctions for ordering troops into separatist areas of japanese Ukraine, and if Moscow launches an invasion of its neighbour. threatened to maneuver on.

“It’s not just geopolitical risks, but further supply tensions,” mentioned OCBC economist Howie Lee.

“Russian oil supplies would disappear overnight if sanctions were encountered … and OPEC could not produce fast enough to cover this gap.”

Some members of the Group of the Petroleum Exporting Nations (OPEC) mentioned this week there was no want for the grouping and its allies to ramp up manufacturing as a doable deal between Iran and world powers over the oil producer’s nuclear program would increase provides.

The US and Iran are engaged in oblique nuclear talks in Vienna that might carry sanctions on Iranian oil gross sales.

Nevertheless, some OPEC members are already struggling to fulfill present manufacturing targets.[OPEC/O]

Japan and Australia mentioned on Thursday they had been able to work with different Worldwide Power Company member states to take advantage of their oil reserves if hostilities in Ukraine scale back world provides.

“While Western governments will probably exempt energy transactions from sanctions, the storm of new sanctions will force many traders to be overly cautious in their handling of Russian barrels,” analysts at Eurasia Group mentioned in a word.

“Brent crude prices are likely to rise above $100 a barrel unless critical alternative supplies become available, for example the Iran nuclear deal or more US shale.”

Iran on Wednesday, nevertheless, urged Western powers to be “realistic” about nuclear talks and mentioned its high negotiators had been returning to Tehran for consultations, suggesting that no breakthrough in its discussions is imminent.

Analysts are additionally warning of inflationary stress on the worldwide financial system from $100 of oil, particularly for Asia, which imports most of its vitality wants.

“Rising oil prices come at a particularly difficult time,” mentioned HSBC economist Frederick Newman.

“Asia’s Achilles Heel energy continues to have huge import requirements, coupled with rising oil prices, bound to severely curtail earnings and growth in the coming year.”

Entrance-month Brent futures have rallied over $20 a barrel from their 2020 lows amid a world lockdown to comprise the unfold of COVID-19. The Brent ahead curve suggests costs to stay above $80 a barrel by the tip of 2023.

Graphic – Booming Brent: Benchmark Brent crude oil has risen above $100 a barrel for the primary time since 2014.


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