Oil rose to $90 a barrel on Wednesday for the first time in seven years on tight supply and rising political tensions between Russia and Ukraine.
Gatekeepers News reports that Brent crude rose $2.15, or 2.4%, to $90.35 by 12:55 p.m. EST (1755 GMT), the first time the global benchmark has broken $90 since October 2014. U.S. West Texas Intermediate (WTI) crude was up $2.25, or 2.6%, to $87.86.
Russia has amassed thousands of troops on Ukraine’s border, fanning fears of an invasion. Energy market prices are higher on worries that Russia’s gas supply to Europe could be interrupted; the nation is also one of the world’s largest oil exporters.
U.S. Secretary of State Tony Blinken said the United States will make sure global energy supplies are not interrupted if Russia takes action.
“World inventories have continued to decline as producers have struggled to restore production to pre-pandemic levels,” said Andrew Lipow, president of Lipow Oil Associates in Houston. “Mix that in with geopolitical tensions between the United States and Russia over Ukraine and prices have continued their march upward.”
U.S. President Joe Biden said on Tuesday he would consider personal sanctions on President Vladimir Putin if Russia invades Ukraine. Separately, Yemen’s Houthi movement launched a missile attack on a United Arab Emirates base on Monday.
The current oil price is higher than the $62 per barrel oil benchmark in the 2022 budget signed by President Muhammadu Buhari in December 2021.
With the development, Nigeria is expected to earn an extra $28 on every barrel of crude sold — but the country’s subsidy shortfall payments will erode the gains.
Meanwhile, the Organization of the Petroleum Exporting Countries and allies, known as OPEC+, will meet on February 2 to consider another output increase.
