The price of a barrel brent oila reference for Europe, exceeded 96 dollars on Monday for the first time since September 2014 due to the escalation of tension over the situation in Ukraine.
The price of a barrel of Brent quality oil marked the $96.09 before the opening of the European stock markets, its highest price since the end of September 2014. Later, it moderated the rise to 94.6 dollars per barrel, closer to its closing price on Friday. At mid-day, it shows an increase of 0.5%.
In so far this year, Brent oil has become more than 21% more expensive, while WTI crude, a benchmark in the United States, has risen more than 26%.
The White House National Security Adviser, Jake Sullivan, stated this Sunday that Russia could invade Ukraine “any day from today”, even this week.
Read: Ukraine demands response from Russia for military activity
“Market participants are concerned that a conflict between Russia and Ukraine could disrupt supply”, said Giovanni Staunovo, a commodities analyst at UBS. He added that the oil market is very sensitive to any news of potential supply disruptions, as oil inventories are low and spare capacity at oil producers is expected to decline further.
“If… there is a troop movement, Brent Crude will have no problem rising above the $100 level”, OANDA analyst Edward Moya said in a note. “Oil prices will remain extremely volatile and sensitive to progressive updates on the situation in Ukraine.”
The tensions come as the Organization of the Petroleum Exporting Countries (OPEC) and its allies, a group known as OPEC+, are struggling to increase output despite promises to raise output by 400,000 barrels per day (bpd) to March.
Read: Ukraine’s leader calls for calm in Russia crisis
The International Energy Agency said the gap between OPEC+ output and its target widened to 900,000 bpd in January, while JP Morgan said the gap for OPEC alone was 1.2 million bpd.
(With information from EP and Reuters)
