Oil tops $105 after Russia attacks Ukraine

Conflict exacerbates concerns about disruptions to global energy supply

NEW YORK:

Oil prices jumped on Thursday, with Brent crude rising above $105 a barrel for the first time since 2014, after Russia’s attack on Ukraine exacerbated concerns about disruptions to global energy supply.

Russia launched an all-out invasion of Ukraine by land, air and sea in the biggest attack by one state against another in Europe since World War Two.

The United States and Europe have promised the toughest sanctions on Russia in response. “If sanctions affect payment transactions, Russian banks and possibly also the insurance that covers Russian oil and gas deliveries, supply outages cannot be excluded,” Commerzbank analyst Carsten Fritsch said.

At least three major buyers of Russian oil were unable to open letters of credit from Western banks to cover purchases on Thursday, sources told Reuters.

Read: Stocks dive, oil jumps above $100 as Russia invades Ukraine

Global benchmark Brent crude rose $7, or 7.2%, to $103.84 a barrel by 1639 GMT, after touching a high of $105.79.

US West Texas Intermediate (WTI) crude jumped $4.95, or 5.4%, to $97.05 a barrel, after earlier rising to $100.54.

Brent and WTI hit their highest since August and July 2014 respectively.

“Russia is the third largest oil producer and second largest oil exporter. Given low inventories and dwindling spare capacity, the oil market cannot afford large supply disruptions,” UBS analyst Giovanni Staunovo said.

Published in The Express Tribune, February 25^th, 2022.

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