Russia, Ukraine crisis impact: Crude oil price crosses $116 per barrel
Brent oil futures hit a high of $116.83 per barrel, the highest level since August 2013. By 0112 GMT, the contract was trading at $116.60 per barrel, up $3.67.
FollowOil prices rose beyond $116 a barrel on Thursday, as trade disruption and shipping challenges caused by Russian sanctions over the Ukraine conflict fueled supply concerns, while U.S. oil inventories plunged to multi-year lows. Despite the price increase, the Organization of Petroleum Exporting Countries and their allies, including Russia, have opted to sustain an increase in output of 400,000 barrels per day in March, disregarding the Ukraine situation and rejecting consumer demands for additional crude.
Brent oil futures hit a high of $116.83 per barrel, the highest level since August 2013. By 0112 GMT, the contract was trading at $116.60 per barrel, up $3.67.
"With the declaration that it will implement export limits targeting Russian oil refining, the White House increased pressure on Russia," ANZ analysts wrote in a note. The market was responding to Washington's newest round of sanctions against Russia's oil refining industry, which increased expectations that Russian oil and gas exports may be next. So far, the Biden administration has refrained from targeting Russia's oil and gas exports while it considers the implications for global oil markets and U.S. energy prices.
According to the International Energy Agency, Russia is the world's third largest oil producer and the largest exporter of oil to global markets. According to the agency, Russian crude and oil product exports hit 7.8 million barrels per day in December. When members of the International Energy Agency voted to release 60 million barrels of oil from emergency inventories, oil prices surged. The United States and 30 other members of the International Energy Agency (IEA) agreed on Tuesday to release 60 million barrels of oil reserves to compensate for supply disruptions caused by the Russia-Ukraine conflict.
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