On Thursday, oil prices surpassed $100 for the first time in more than seven years after Russian President Vladimir Putin announced a “military operation” in Ukraine, seemingly in response to fears of an invasion. Following the announcement, Brent jumped to $100.04 per barrel, as fears of a full-scale conflict in Eastern Europe intensified. WTI reached $95.54 per barrel.
It happened after Mr. Putin made an unexpected television announcement announcing his intentions. He announced soon before 6:00 a.m. (0300 GMT) in Moscow, “I have made the decision of a military action,” and pledged punishment against anyone who interfered.
Oil prices soar after Russia announced Invasion of Ukraine
Oil prices soared after Russian president announced war against Ukraine. He also urged the Ukrainian military to surrender its weapons. His remarks come after the Kremlin stated rebel commanders in eastern Ukraine had requested military assistance from Moscow in their fight against Kyiv. After Russia recognized two separatist regions in Ukraine this week and claimed it would provide “peacekeepers,” US officials warned of an impending Russian incursion.
Fears of a movement grew as separatists appealed for assistance in repelling Ukrainian forces. Concerns over supplies of critical commodities such as wheat and metals have risen as a result of the reopening of economies following pandemic lockdowns, owing to the potential of a firestorm.
Crucially, oil has risen sharply in recent weeks, and world benchmark Brent finally broke through the $100 level on Thursday, a feat last witnessed in September 2014. “Given the importance of Russia and Ukraine to energy, hard commodities, and soft commodities, Russia/Ukraine tensions present both a probable demand shock (for Europe) and, more importantly, a far larger supply shock for the rest of the world,” said Tapas Strickland of National Australia Bank.
Many fear that the fragile global economic recovery may be thrown off track as governments try to curb runaway inflation spurred by demand as life resumes following recent lockdowns.