Oil Prices Soar after Russia attacks Ukraine.

Oil prices soar on Thursday, with Brent 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. The United States Oil Fund (USO) was up around 6% and the United States Natural Gas Fund (UNG) was nearly 7% higher.

Stocks for USO

West Texas Intermediate crude oil was up by $6.95 at $99.05 per barrel at the New York Mercantile Exchange. The global benchmark Brent crude gained $7.47 to $104.31 per barrel and natural gas futures were $0.29 higher at $4.91 per 1 million BTU.

“Oil prices are soaring with no end in sight as the news of Russia’s full-scale military incursion of Ukraine, immediately putting at risk up to 1 million bpd (barrels per day) of Russian crude oil exports transitioning through Ukraine and the Black Sea,” said Louise Dickson, senior oil market analyst at Rystad Energy.

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.

In the United States, commercial crude inventories USOILC=ECI rose 4.5 million barrels last week to 416 million barrels, much more than analysts’ expectations in a Reuters poll for a 400,000-barrel build.

However, crude in the U.S. Strategic Petroleum Reserve fell 2.4 million barrels to 582.4 million barrels, its lowest since 2002, government data showed. Globally, oil supplies remain tight as demand recovers from pandemic lows.

Written by Maryam Nawaz

MPhil International Relations (Specialization in International Politics and Economy)

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