Home » Blog » Crude oil at 14 years high, world budget will deteriorate | Russia Ukraine conflict

Crude oil at 14 years high, world budget will deteriorate | Russia Ukraine conflict

Russia Ukraine war: Crude oil Price
Russia Ukraine war: Crude oil Price

America and European countries are continuously tightening sanctions on Russia. Preparations are underway to ban Russian oil and gas after SWIFT was pulled out and several companies left the Russian market.
After the attack on Ukraine, Russia is facing tough economic sanctions. Now America and European countries are also preparing to ban Russian oil and gas. For this, efforts are being made to bring Iran back to the market. However, due to the delay in this direction, there has been a record rise in the price of crude oil and it has reached a 14-year high.

Crude oil climbed so much in minutes

According to a Reuters report, Brent crude has now risen by $ 11.67, or about 10 percent, to $ 129.78 per barrel. This is the highest level of crude oil since 2008. Similarly, West Texas Intermediate (WTI) has also jumped by $ 10.83, or 9.4 percent, to $ 126.51 per barrel. In terms of percentage, this is the biggest one-day increase in both these variants of crude oil since May 2020. Within minutes of the start of trading on Sunday, both crude oil and West Texas Intermediate rose to their highest levels since July 2008. In July 2008, Brent crude had reached $147.50 and WTI at $147.27 per barrel.

Russia and China made this demand

In order to bring Iran back to the oil market, America and Western countries are trying to start afresh talks on the 2015 nuclear deal. Amidst speculation about this, Russia on Sunday demanded a guarantee from the US that the sanctions imposed on it regarding Ukraine will have no effect on Russia’s trade with Iran. According to sources, China has also imposed new demands. Due to this, a cloud of uncertainty has come over the conversation.

The nuclear deal with Iran possible

On Russia’s demand, US Secretary of State Antony Blinken said that the sanctions imposed on Russia have nothing to do with a possible deal with Iran. Blinken also told that the US and its European allies are looking for ways to ban the import of Russian oil. He said that the US Congress is moving forward on its ban. Blinken’s statement and the uncertainty over talks with Iran gave crude oil a chance to climb.

Crude oil can go up to $ 200

Russia currently supplies about 7 million barrels of oil daily. In the case of refined products, Russia’s share in the total global supply is about 7 percent. Analysts of Bank of America believe that if most of Russia’s supply is stopped, then the market may decrease by 5 million barrels in one stroke. If this happens, then the price of crude oil can go up to $ 200 per barrel. Analysts are of the opinion that it may take months for Iran to compensate for Russian supplies.

Many countries may have these problems

If this happens then it will affect the whole world, there are many countries which depend on imports to a large extent for their fuel and energy needs. And imports about 85 percent of its needs. As the price of crude rises in the global market, the import bill of these countries will also become thick. Due to this, there is a danger of a sharp decline in foreign exchange reserves. For many countries, such a situation will be disturbing.

Learn More

Share This Post

Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>