NATIONAL NEWS

Global oil prices soar above $100 and could go much higher

Feb 24, 2022, 6:17 AM | Updated: Jun 13, 2022, 3:39 pm
FILE - Brent crude oil hit $100 a barrel and stock futures fell sharply late Wednesday after blasts...
FILE - Brent crude oil hit $100 a barrel and stock futures fell sharply late Wednesday after blasts were heard in Ukraine and Russian President Vladimir Putin announced a military operation in Donbas. (FREDERIC J. BROWN/AFP/Getty Images)
(FREDERIC J. BROWN/AFP/Getty Images)

(CNN) — Oil prices surged above $100 per barrel after Russia launched an invasion of Ukraine, piling pressure on a global economy already reeling from rampant inflation.

Brent crude, the global benchmark, added 8.5% to trade at $105.40 per barrel by 5:30 a.m. ET on Thursday. Brent last traded above $100 per barrel in 2014. US oil prices increased 8% to over $100 per barrel.

A broad offensive by Russian forces targeted military infrastructure across Ukraine as well as several airports early Thursday. The assault began hours before dawn and quickly spread across central and eastern Ukraine as Russian forces attacked from three sides.

Russia is the world’s No. 2 oil producer and a major exporter of natural gas. Supply disruptions could drive retail prices higher, making it more expensive for people around the world to fuel their cars and for Europeans to heat their homes. Gasoline prices are already at record levels in parts of Europe.

Global oil supplies were already very tight.

Crude oil for near-term delivery is commanding a record premium over longer dated contracts, according to analysts at UBS, as investors react to dwindling inventories and increased demand. Some refineries are avoiding buying Russian oil due to sanctions fears, they added.

Prices have marched steadily higher for nearly a year, driven by resurgent demand following the easing of pandemic lockdown measures. The Organization of the Petroleum Exporting Countries (OPEC) and 10 other major crude oil producers, including Russia, have been gradually raising output but have struggled to meet their own production targets despite huge pressure from major energy consuming nations to pump more.

The Ukraine crisis adds another dimension to the OPEC+ coalition’s fraught politics. The Russian economy is heavily dependent on revenue from oil and gas, and Moscow wants prices to remain elevated. Saudi Arabia — a major US ally — will now come under intense pressure from developed economies to increase output.

A tight market and armed conflict in Europe is a potent combination. Oil prices could settle as high as $140 per barrel in a worst case scenario where energy flows are disrupted, according to analysts at Capital Economics.

The International Energy Agency warned earlier this week that military action could put at risk 250,000 barrels per day of Russian oil exports transiting Ukraine via pipeline to supply Hungary, Slovakia and the Czech Republic. However, those countries have ample emergency stocks.

There are limited sources of additional supply. Rising prices will encourage US shale producers to increase output. A nuclear agreement between Iran and the West that eases sanctions on the OPEC member could also bring more barrels onto the market.

“An Iranian nuclear deal that removes sanctions and raises production remains a wild card, but the market will increasingly need additional oil,” said analysts at S&P Global Platts Analytics.


The-CNN-Wire
™ & © 2022 Cable News Network, Inc., a WarnerMedia Company. All rights reserved.

KSL 5 TV Live

Top Stories

National News

U.S. President Joe Biden delivers remarks during a reception to celebrate the Jewish New Year with ...
MATTHEW LEE, FATIMA HUSSEIN and AAMER MADHANI, Associated Press

Biden vows Russia won’t ‘get away with’ Ukraine annexation

The United States and its allies are hitting back at Russia’s annexation of four more Ukrainian regions, slapping sanctions on more than 1,000 Russian individuals and companies.
1 day ago
A dip in suicide rates in 2019 continued into 2020, but the CDC report, released on September 30, s...
Deidre McPhillips, CNN

US suicide rates rose in 2021, reversing two years of decline

A dip in suicide rates in 2019 continued into 2020, but a CDC report released on Sept. 30 shows that 2021 reversed most of that improvement and brought rates back to near-record levels.
1 day ago
FILE - The newly painted Cinderella Castle at the Magic Kingdom at Walt Disney World is seen with t...
Forrest Brown, CNN

Florida theme parks and tourist attractions: What’s open and closed

Walt Disney World and a few other places reopened on Friday, and other major spots aim to reopen this weekend.
1 day ago
U.S. Supreme Court Associate Justice Ketanji Brown Jackson and Chief Justice John Roberts pause for...
MARK SHERMAN, Associated Press

Justice Jackson makes Supreme Court debut in brief ceremony

Justice Ketanji Brown Jackson has made her first appearance on the Supreme Court bench in a brief courtroom ceremony three days before the start of the high court’s new term.
1 day ago
Rain from Hurricane Ian floods a street on September 30, 2022 in Charleston, South Carolina. Ian hi...
Meg Kinnard and Adriana Gomez Licon, Associated Press

Ian makes landfall again, this time in South Carolina

Hurricane Ian has made another landfall, this time in South Carolina, after carving a swath of destruction across Florida earlier this week.
1 day ago
COMMUNITY -- "Basic Human Anatomy" Episode 410 -- Pictured: (l-r) Danny Pudi as Abed, Yvette Nicole...
Leah Asmelash, CNN

A ‘Community’ movie is finally on its way

"Community," the comedy series about a group of students at a community college, will return with a long-awaited movie on Peacock.
1 day ago

Sponsored Articles

Portrait of smiling practitioner with multi-ethnic senior people...
Summit Vista

How retirement communities help with healthy aging

There are many benefits that retirement communities contribute to healthy aging. Learn more about how it can enhance your life, or the life of your loved ones.
Happy diverse college or university students are having fun on their graduation day...
BYU MBA at the Marriott School of Business

How to choose what MBA program is right for you: Ask these questions before you apply!

Wondering what MBA program is right for you? Take this quiz before you apply to see if it will help you meet your goals.
Cloud storage technology with 3d rendering drawer with files in cloud...
PC Laptops

How backing up your computer can help you relieve stress

Don't wait for something bad to happen before backing up your computer. Learn how to protect your data before disaster strikes.
young woman with stickers on laptop computer...
Les Olson

7 ways print marketing materials can boost your business

Custom print marketing materials are a great way to leave an impression on clients or customers. Read for a few ideas to spread the word about your product or company.
young woman throwing clothes to organize a walk in closet...
Lighting Design

How to organize your walk-in closet | 7 easy tips to streamline your storage today

Read our tips to learn how to organize your walk-in closet for more storage space. These seven easy tips can help you get the most out of your space.
Types of Computer Malware and Examples...
PC Laptops

5 Nasty Types of Computer Malware and Examples | Everything You Need to Know to Keep Your Computer and Family Safe

Here are the different types of computer malware and examples that could potentially infect your computer.
Global oil prices soar above $100 and could go much higher