Oil prices are surging as the crisis between Russia and Ukraine escalates.
Russian President Vladimir Putin has ordered military troops into two breakaway regions of eastern Ukraine and said he would recognize the independence of Donetsk and Luhansk.
In Asian trading the price of crude surged 4.52% to $95.19 U.S. per barrel, while Brent crude oil jumped 3.13% per barrel to $98.40 U.S. a barrel.
Rising tensions have sent jitters through markets, driving oil prices higher. U.S. President Joe Biden said the U.S. believes Putin has decided to carry out an attack on Ukraine “in the coming days.”
Russia has built up some 150,000 troops along its border with Ukraine, and the Biden administration said last week that as many as 7,000 additional troops have joined.
The military tensions have sparked concerns that Russia may be preparing to invade Ukraine, triggering fears of a repeat of the Kremlin’s illegal annexation and occupation of Crimea in 2014.
Russia was the largest supplier of natural gas and oil to the European Union last year, and these tensions are lending support to higher oil prices.
Crude prices recently crossed $90 U.S. per barrel, representing an increase of more than 20% so far this year and a rally of more than 80% since the beginning of 2021. Those gains, however, can also be attributed to other factors such as tight global supplies.
Some analysts see oil spiking above $100 U.S. per barrel as the Ukraine crisis worsens.
A deal aimed at reviving Iran’s 2015 nuclear agreement is expected to be very close to being reached, raising the possibility of more than one million barrels a day of Iranian crude oil returning to the global market, though no deal has yet been reached.
