Oil Jumped to its Highest Point in Several Years

Oil reached its highest level since 2014 on Tuesday as tensions between Russia and Ukraine escalated after Russia ordered troops into two breakaway regions in Eastern Ukraine, adding to supply concerns that are pushing prices to near $100 a barrel.

The United States, as well as its European allies, are expected to announce new sanctions against Russia. On Monday, President Vladimir Putin formally recognized the two regions in eastern Ukraine. 

Brent crude gained $3.38 or 3.5% at $98.77 at 10:00 GMT, having earlier reached $99.50, the highest since September 2014. 

U.S. West Texas Intermediate (WTI) crude added $4.40 or 4.8% to $95.47 versus Friday’s settlement. At some point on Tuesday, WTI crude reached $96, also the highest since 2014. 

Oil and tensions

The ongoing crisis in Europe helped boost the oil market. The oil market surged due to tight supplies as demand recovered from the pandemic. 

The Organization of the Petroleum Exporting Countries (OPEC) and its allies, known as OPEC+, resisted calls to boost supply more rapidly. 

On Tuesday,  a senior British minister made an interesting comment. British Health Secretary Sajid Javid stated that Russia’s invasion of Ukraine created a situation as grave as the 1962 Cuban missile crisis. 

Last week, Saudi Energy Minister Prince Abdulaziz bin Salman stated that OPEC+ needed to retain a cautious approach. Iraq’s oil minister Ihsan Abdul Jabbar said that OPEC+ should stick to its agreement to avoid surprises. 

Nigeria’s petroleum minister Timipre Sylva expressed his opinion on Tuesday. According to Sylva, there is no need for OPEC+ to expand its oil production increases, even as oil nears $100 a barrel, as a potential deal between Iran and world powers will increase supplies.  

A deal between Iran and world powers could pave the way for OPEC member Iran to raise its oil exports.