Geopolitical tensions between Russia and Ukraine are driving global oil prices close to $100 a barrel, with traders pricing in the impact on fuel exports from Russia.
- Crude oil prices surged to an eight-year high due to geopolitical risks hounding Ukraine on Friday. Brent prices have since fallen to $94.07 a barrel, with prices below $100 a barrel since 2014.
- Analysts believe the market is setting up for a “period of turbulence,” noting that the threat could be more prominent amid the tight energy markets. Demand for the commodity has outpaced production growth following the COVID-19 pandemic.
- Supplies are being threatened by a possible invasion of Ukraine by Russia, which is currently the third-largest oil producer. This could lead to lower flows of Russian crude to the market.
- Analysts noted that a major disruption still seems to be unlikely, as the United States has yet to hint at any retaliatory measures such as penalties on the Russian energy sector. The White House indicated that no punishment is off the table.
The Organization of the Petroleum Exporting Countries and its allies have earlier committed to boosting market supplies amid higher demand.
Brent is down 0.44%.
Source: Wall Street Journal