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Highlights
- Brent Crude oil prices hit the mark of US$105/bbl on Thursday.
- The tension escalated on Thursday after Russian President, Vladimir Putin officially announced the war.
- The US sanctions on Russia are expected to create chaos in the global energy market and may push oil prices to much higher levels.
Brent Crude oil prices hit the mark of US$105 on Thursday, the highest since 2014 after Russia started to invade Ukraine, exacerbating concerns about disruptions to the global energy supply.
However, the prices eased after Biden said the US is working with other countries on a combined release of additional oil from global strategic crude reserves.
Earlier, the prices hovered near US$100/bbl on Tuesday, after Russia had ordered troops into two autonomous regions in eastern Ukraine.
Must Read: Crude oil rises on fresh Russia-Ukraine war warnings
May delivery Brent Crude oil futures last traded at US$97.66 per barrel up 2.15%, whereas April delivery WTI crude oil futures traded 2.06% up at US$94.72 per barrel as of 25 February 2022 at 12:50 PM AEDT.
The tension escalated on Thursday after Russian President, Vladimir Putin officially announced the war. The country has launched an all-out invasion by air, land, and sea, recording one of the biggest attacks by one state against another in Europe, since World War Two.
Must Read: Crude oil hits fresh seven-year high amid Russia-Ukraine tension
Tensions on the stability of the energy market
The ongoing war between both nations has prompted instability in the energy market as Russia is one of the largest producers of crude oil and natural gas in the world. Both US and Britain already imposed sanctions on Russia. The US and Europe blacklisted Russian banks politicians respectively.
Furthermore, on Wednesday the US also imposed sanctions on the company in charge of building the Nord Stream 2 project.
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The US sanctions on Russia are expected to create chaos in the global energy market and may push oil prices to much higher levels. The western countries’ sanctions on Russia could disrupt the oil supply into the market.
Good Read: How a Russian invasion of Ukraine might impact crude oil prices
The US and Iran have been engaged in indirect talks in Vienna that could lead to the removal of sanctions on Iranian oil. This could help the market to get an uninterrupted supply of 1Mbpd of oil.
Meanwhile, Japan and Australia said they were prepared to tap their oil reserves, together with other member nations of the International Energy Agency, if global supplies would hit by the Ukraine crisis.
Also Read: WTI Crude surpasses US$90/bbl as frigid weather cascades across the US
Bottom Line
Crude oil prices hit the mark of US$105 on Thursday within hours of the announcement of war being official. Not only crude oil, but the global commodity market has also been gaining momentum due to the ongoing crisis between Russia and Ukraine.
