As the Russia-Ukraine crisis enters the third week, oil prices have continued to soar amid concerns of another global economic recession. Brent crude price hit $139.13 per barrel as markets opened on Monday, more than twenty dollars more than its $118.39 closing price on Friday.
This latest increase is a direct impact of reports that the United States and Europe are considering a ban on Russian crude as part of sanctions imposed on Russia for its invasion of Ukraine.
The highest crude has sold was $147.50 in July 2008 but analysts believe that it could go even higher because of the geopolitical implication of the crisis in Ukraine. Russia is the third-largest producer of oil and a cut-off of its oil output could shorten global supplies by as much as five million barrels, which in turn could drive the price as high as $200 in the coming weeks.
The reported ban on Russian oil is said to be the ‘nuclear option’ and the US Secretary of State Antony Blinken stated that the country was considering the options available. “We are now in very active discussions with our European partners about banning the import of Russian oil to our countries, while of course at the same time maintaining a steady global supply of oil,” he said.
Across the pond, the European Commission President Ursula von Der Leyen is yet to declare this line of action but she has expressed previously that the EU’s plan is to impose sanctions on the Russian president Vladimir Putin that will curtail his funding streams. “The goal is to isolate Russia and to make it impossible for Putin to finance his wars,” she said, adding “For us, there is a strong strategy now to say we have to get rid of the dependency of fossil fuels from Russia.”
