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Highlights
- Crude oil prices hover near US$100/bbl on Tuesday.
- Russian force killed a group of five saboteurs on Monday who breached Russia’s southwest border from Ukraine.
- The US and Britain have announced sanctions targeting Russian banks while Europe blacklisted more politicians.
- The ongoing crisis has further supported oil prices that were already buoyed on tight supplies and demand recoveries from the COVID-19 pandemic.
Crude oil prices hovered near US$100/bbl on Tuesday to reach the highest level since 2014 after the tension between Russia and Ukraine escalates. The country has ordered troops into two autonomous regions in eastern Ukraine.
However, the Brent crude trimmed its gains at the later trading sessions after the Western government announced sanctions intended to stop the beginning of a full-scale invasion.
Must Read: Crude oil rises on fresh Russia-Ukraine war warnings
May delivery Brent Crude oil futures last traded at US$93.97 per barrel up 0.63%, whereas April delivery WTI crude oil futures traded 0.18% up at US$92.08 per barrel as of 23 February 2022 at 12:58 PM AEDT.
On Monday, Russian forces killed a group of five saboteurs who breached Russia’s southwest border from Ukraine. However, Ukraine called it a piece of fake news.
Must Read: Crude oil hits fresh seven-year high amid Russia-Ukraine tension
US and Britain sanctions
The US and Britain announced sanctions targeting Russian banks while Europe blacklisted more politicians. Germany, on the other hand, stopped the US$11 billion Nord Stream 2 project.
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The rising tension between Russia and Ukraine has triggered crude oil supply tension as Russia is the largest producer of crude oil in the world and the US and European Commission sanctions on Russia will disrupt the oil supply into the market.
Though, a senior U.S. State Department official stated on Tuesday that Ukraine chaos is not going to affect the oil and gas supplies.
Joe Biden, the US President announced the first wave of sanctions on Russia, targeting its banks and sovereign debt. This time, the sanctions don’t include energy supplies.
Good Read: How a Russian invasion of Ukraine might impact crude oil prices
The ongoing crisis has further supported oil prices that were already buoyed on tight supplies and demand recoveries from the COVID-19 pandemic.
Image source: © Gumpapa | Megapixl.com
The Organisation of the Petroleum Exporting Countries (OPEC) along with its allies is also struggling to produce up to its agreed quota, further raising supply concerns.
Currently, talks on restoring deals to curb Iran's nuclear program and ease sanctions are near conclusion. The revival of the deal is expected to pump as much as 1Mbpd of oil into the market to cool boiling prices of crude oil.
Also Read: WTI Crude surpasses US$90/bbl as frigid weather cascades across the US
Bottom Line
Crude oil prices hovered near US$100 per barrel on Tuesday as the US and Europe announced the initial stage of sanctions imposed on Russia.
