Global crude oil prices have reached $110 US dollars per barrel, whereas Russia’s ongoing military campaign against Ukraine is scaring markets with the threat of a possible ‘shock’ to the global supply of oil.
In the United State, the price of Brent went up by a staggering 9%, reaching $113,63 dollars per barrel – the highest level since 2014.
In addition, the price of natural gas in Europe went up by more than 60% – reaching $215 dollars per megawatt-hour.
Russian natural resources haven’t been affected by western sanctions yet, but following Kremlin’s decision to invade Ukraine – this continues to remain an option for the US and Europe.
This is what’s raised concerns amongst investors who are now hesitating to buy Russian oil as a result of the current market uncertainty that could also be linked to the restrictions imposed on Russian transactions and several major Russian banks being banned from the global SWIFT system.
Meanwhile, the price of gas in the United States is going up fast – reaching record highs that haven’t been noticed since Hurricane Katrina back in 2005.
The national average price of gas has reached $3.92 dollar a gallon – the highest since April 2012.
This means that the price of gas has gone up by 11% since February 23 – the day Russia announced its military operation against Ukraine.
Hurricane Katrina struck the US Gulf Coast in 2005, by dealing a major blow to the country’s gas and oil industries.
According to CNN business experts, at the current pace, gas prices could soon reach a national average of $4 dollars a gallon – which would be very close to breaking the 2008 record of $4.11 dollars a gallon.
Prices are also going up as a result of Russia being one of the biggest exporters of oil in the world – sending the majority of this oil to Europe and Asia.
Russian oil only made up 2% of imports in the US last December, but seeing that the price of oil is closely linked to the global commodities market – the impact of the Ukraine War will definitely be felt in markets worldwide.
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