Tarek al-Mala, Minister of Petroleum of Egypt, on Sunday, revealed that a significant increase in oil prices is negatively affecting the North African country.
“The whole world is harmed by the current oil prices, we hope these prices will not last for a long period … We hope gas exports compensate for part of the cost of importing oil and petroleum products,” he said.
Since Russia invaded Ukraine ten days ago, oil prices have risen significantly. Both Brent and West Texas Intermediate (WTI) crude oil futures prices increased by more than $100 per barrel on Thursday. Following a rise and a subsequent decline on February 28, the front-month Brent contract price closed below $115/b on March 2.
Brent crude oil prices last rose above $100/b in late 2014. On March 2, the WTI front-month contract price closed above $110/b after first closing above $100/b on March 1.
Brent crude oil is a type of crude oil found in the North Sea in Northwest Europe, and is often used as a global benchmark. West Texas Intermediate crude oil is used as a benchmark in the United States. Trading of these benchmarks has been more volatile lately than in the past. Brent crude oil price ranged between $105.79/b and $97.56/b on February 24, an intraday price range of $8.23/b that is nearly four times the average price range during 2021. The only other time since January 2021 that the range has exceeded $8/b was on November 26, following the World Health Organization’s identification of the Coronavirus Omicron variant.
On February 25, the Brent crude oil price decreased. However, developments in the Ukraine-Russia conflict and new sanctions imposed on Russia over the weekend increased the Brent price on February 28. Throughout the past week, news of Russia’s continued invasion has had a significant impact on crude oil trading.
After the United States and Saudi Arabia, Russia is the world’s third-largest producer of oil and liquid fuels. The country is also one of the world’s major petroleum exporters. Crude oil prices have been more volatile and higher since mid-January 2022 due to the geopolitical risk related to Russia’s further invasion of Ukraine.
Higher petroleum demand as the COVID-19 pandemic has begun to subside and slower crude oil production growth have also put upward pressure on global crude oil prices.