Oil prices reached 8-year highs, approaching $100 a barrel on the Brent crude index, as Russia’s Vladamir Putin ordered troops to invade neighboring Ukraine.
The invasion has triggered a unified response from Western nations, including Germany and the United States. Yesterday, in a speech from the White House, President Joe Biden announced fresh sanctions against Russia, opting to save more stringent measures for any further incursion that Russia might make into Ukraine.
Higher oil prices places increased domestic political pressure on the Biden administration. Last week, in an effort to coordinate with Saudi Arabia, the U.S. sent the National Security Council’s Coordinator for the Middle East and North Africa Brett McGurk to Saudi Arabia and the United Arab Emirates to bolster ties. While in Saudi Arabia, State Department Special Envoy for Energy Affairs Amos Hochstein joined Mr. McGurk to “discuss a collaborative approach to managing potential market pressures stemming from a possible Russian invasion of Ukraine.”
Germany has said it would not allow the Nord Stream 2 gas pipeline from Russia to Germany to proceed forward in a blow to Russian business interests.
Russia is one of the world’s largest producers of oil and natural gas, accounting for 17% of the world’s natural gas and 12% of its oil.
This weekend, Saudi Arabia reiterated that underinvestment in oil and gas was a problem and said that focusing only on renewables while campaigning against oil and gas was a mistake, per OilPrice.com.
Meanwhile, some speculators see oil climbing higher. According to CNBC, an increasing number of forecasters predict oil will surpass $125 a barrel and possibly even reach $150, depending on how the crisis unfolds.
