Crude Oil Prices Hit $100 Mark, Consequences Of Escalating Russia-Ukraine Crisis
Mumbai, Feb 24: Global crude oil prices surged past the $100 mark on Thursday after Russian President Vladimir Putin ordered military action in eastern Ukraine.
Russia’s military action came days after it recognised the two breakaway regions of Donetsk and Luhansk in eastern Ukraine as independent regions.
The Brent crude oil prices surged to $100 a barrel for the first time since 2014 as traders feared that any further sanctions on Russia could impact its crude oil export.
Experts had voiced concerns of a significant rise in oil prices if Russia-Ukraine tensions intensified.
Moody’s Investors Service Managing Director Michael Taylor said the global price of oil and LNG was likely to rise sharply. According to Taylor, while the rise in the prices will be positive for a relatively few exporters in the Asia Pacific region, it will be negative for the substantially greater number of net energy importers.
ICICI Securities Chief Economist Prasenjit Basu said: “Oil prices are likely to remain well elevated, which is above $90 a barrel, for several months once the US imposes additional sanctions on Russia, including its ability to export oil and gas.”
Russia exports about 5 mmbd (million barrels per day) of crude oil, more than half of which goes to Europe and 42 per cent to Asia. The largest single customer for Russia’s oil exports is China, which takes 31 per cent of the total followed by Germany and the Netherlands, which accounts for 11 per cent each. India accounts for a negligible (less than 1 per cent) share in Russia’s oil exports.
