Russia-Ukraine Crisis: Oil tips over $100 per barrel

Oil prices are at $105 per barrel. This is its highest level since 2014. This comes as Russia is conducting a large-scale military invasion of Ukraine. Russia is the world’s second largest oil producer with 10,000,000 barrels produced per day.

Oil prices have spiked in recent months as the Organisation of Petroleum Exporting Countries (OPEC) refuses to increase production to meet growing demand. Global energy markets in general have seen increased prices due to shortages in Coal, Oil and Natural Gas as winter demand and the end of COVID-19 lockdowns have led to much higher demand than was projected.

Western countries have threatened harsh economic sanctions if Russia invaded Ukraine. This has caused fear that sanctions would impact Russia’s energy exports, which would make a bad situation worse with supplies already struggling to meet demand. Russia currently supplies 40% of Europe’s energy.

Many have argued that this dependency has emboldened Russia to take action, knowing that Europe can not cut its imports of Russian energy without collapsing the European energy markets. Western states are now expected to take steps to end their dependence on Russian oil and gas. This will lead to a significant shift in global energy markets as Europe looks for new suppliers and Russia looks for new markets.

As a new oil exporter, oil prices can have a significant impact on Guyana’s revenues as every $1 increase in oil prices increases our revenue per lift of crude by $200 million GYD.

More, In The Ring.