- A possible ban on Russian crude has led to a tremendous hike in oil and gas prices.
- Brent crude hit a record level of US$139.13 a barrel as trading started on Monday.
- Gas prices have recently surpassed the US$4 a gallon mark for the first time in more than ten years.
The Russia-Ukraine war has taken a heavy toll on the global markets and the situation doesn’t seem to get better any time soon. The Western countries have been imposing all kinds of sanctions on Russia, like travel bans and a freeze on Russian assets, to retaliate against its aggression in Ukraine. Russian crude is next on the list as the European countries and the US are considering imposing a ban. This may lead to a tremendous hike in the oil global oil prices.
With a hike of over 10%, surging oil prices have created fears of a stagflationary shock for the global markets. After closing at US$118.03 a barrel on 4 March, Brent crude’s global benchmark soared by over US$20 and reached a record level of US$139.13 a barrel as trading began on Monday.
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In July 2008, Brent crude had hit US$147.50 a barrel, and this record high level could potentially be surpassed now due to the ongoing geopolitical tensions. As crude oil prices have a significant impact on natural gas prices, gas prices are also rising and have recently surpassed the US$4 a gallon mark for the first time in more than 10 years.
The stock markets have also taken a hit due to the ongoing crisis, with Tokyo’s Nikkei and Hong Kong’s Hang Sang both down by over 3% at the start of Monday’s trading. The FTSE 100 and S&P 500 were also down by 2.6% and 1.3% respectively in futures trade.
Let’s look at 3 FTSE oil and gas stocks that may be impacted by the ongoing events.
BP plc (LON: BP)
London-headquartered oil supermajor BP plc has recently given up its 20% stakes in the Russian oil giant Rosneft amid the ongoing war situation. The market capitalisation of the FTSE100-listed company stood at £68,808.41 million as of 4 March 2022. It has delivered a return of 9.21% to its shareholders over the last year as of 4 March 2022, while its year-to-date return stood at 5.34%. BP plc’s shares closed at GBX 348.15, down by 2.87%, on 4 March 2022.
Shell Plc (LON: SHEL)
Leading oil and gas company, Shell plc, has announced on 5 March that it would channelise all profits it makes from any Russian oil purchases into a fund for providing humanitarian aid to Ukraine. The market capitalisation of the FTSE100-listed company stood at £139,397.70 million as of 4 March 2022. It has delivered a return of 18.41% to its shareholders over the last one year as of 4 March 2022, while its year-to-date return stood at 13.05%. Shell plc’s shares closed at GBX 1,833.40, down by 5.02%, on 4 March 2022.
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Harbour Energy plc (LON: HBR)
London-headquartered Harbour Energy plc is the largest independent oil and gas company in the UK. The market capitalisation of the FTSE250-listed company stood at £3,655.85 million as of 4 March 2022. It has delivered a return of 11.58% to its shareholders since the start of 2022 as of 4 March, however, the company hasn’t performed well over the past year and its one-year return stood at -35.63%. Harbour Energy plc’s shares closed at GBX 395.00, down by 1.74%, on 4 March 2022.