Oil prices rose by 15% due to intensification conflict between Russia and Ukraine-Budrigan Ltd
Budrigantrade.com - After ceasefire negotiations between Russian and Ukrainian forces failed on Tuesday, global oil markets increased by more than 10%. Traders worried that international sanctions against Moscow would severely hamper the country's energy exports drove up crude prices.
The most active contract in Brent, the global benchmark for crude, was up $12.47, or almost 15%, to $106.19 a barrel at 12:10 PM ET (16:10 GMT).
The benchmark for U.S. crude, West Texas Intermediate, or WTI, was $107.53, up $11.07, or 14.3%.
Even after the Paris-based International Energy Agency announced the coordinated release of 60 million barrels from the emergency reserves of consuming nations to alleviate the anticipated squeeze on oil caused by the Russia-Ukraine conflict, crude prices continued to rise.
"To send a unified and strong message to global oil markets that there will be no shortage in supplies as a result of Russia’s invasion of Ukraine," the Paris-based EIA stated.
On Tuesday, negotiations to end the conflict did not result in an immediate breakthrough, and fighting erupted once more between the two sides. Ukrainian President Volodymyr Zelenskyy urged the West to impose a no-fly zone over his country for Russian aircraft.
Concerns about the world's ability to cope without a consistent supply of oil from Russia, which supplies about a tenth of the world's requirements for crude, have grown as a result of the most recent developments.
Russia trades billions of dollars worth of oil and other commodities every day, but the global interbank payment system known as SWIFT was shut down by the United States, Britain, Europe, and Canada.
Due to its own dependence on Russian oil and gas, the West initially avoided imposing sanctions on Moscow's energy exports.
However, over the weekend, this perspective changed, as EU officials confirmed on Monday their plan to wean the bloc from its reliance on Russian energy, despite the fact that they were prepared to endure immediate spiraling costs for oil and gas. Since the start of the year, crude prices have gone up by more than 35%.
The most recent rise in crude prices occurred prior to the meeting of the global oil producer alliance OPEC+ on Wednesday. At this meeting, it is anticipated that OPEC+ will continue with its gradual output increase strategy and will disregard requests from consuming nations under the IEA.