Recent statements by US Secretary of State Blinken indicating that the White House had been considering the importation of Russian oils has generated worries over the supply of crude oil. Global oil prices began skyrocketing and reached US$139 per barrel, with brent crude prices rising by 18% within a minutes-long interval, though the price hike has narrowed to a mere 9% shortly afterwards, according to Bloomberg.

As the market fretted over the tight supply of oil in light of the Russian invasion of Ukraine, oil prices last week underwent the highest price hike within the past two years. In addition, Secretary Blinken indicated that the Biden administration and its various European allies have been planning to stop importing oil from Russian in an attempt to expand sanctions against the country.

The IMF warns that the Russian-Ukrainian war and the resultant sanctions against Russia will likely have severe impacts on the global economy. Although geopolitical relations remain unstable and outlooks seem massively uncertain, economic repercussions are already quite serious.

Last weekend, Saudi Arabia raised the prices of the Arab Light crude bound for Asia next month to US$4.95 per barrel, marking the highest price hike since Bloomberg began tracking such data in 2000. Libyan minister of oil and gas claimed that, as the OPEC member becomes increasingly entrenched in deep political crises, the country’s oil production has now fallen below one million barrels per day. These aforementioned factors are all expected to result in bullish oil prices.

 (Image: Flickr/Roy Luck CC BY 2.0)