After Russia launched an invasion of Ukraine, oil prices soared beyond $100 (£74) per barrel, reaching their highest level in more than seven years.
As investors fretted about the conflict’s potential consequences, global stock markets plummeted and gold prices climbed.
Russia is the world’s second-largest crude oil exporter and the world’s largest natural gas exporter. The price of oil surpassed $103 per barrel, and the RAC predicted that UK gasoline prices will continue to grow.
Although Russia contributes only 6% of the UK’s crude oil and 5% of its gas. There are concerns that sanctions may restrict supplies and raise prices globally. On Thursday, the price of UK natural gas futures jumped about 30%.
Consumers in the United Kingdom are already paying a high price for energy and fuel. And demand has risen as a result of the relaxation of Covid limitations.
The spike in oil prices, according to RAC fuel spokesman Simon Williams, “would certainly lead to wholesale gasoline price increases, which will in turn push record pump prices further higher.”
“There’s a very real possibility that the average price of petrol will approach £1.55 a liter” if oil prices continue to rise to $110 a barrel, he warned. On Wednesday, the average price per liter of unleaded gasoline reached a new high of 149.30p.
Stock Markets- Russia
Stock markets across Europe were hit hard by the news of Russia’s actions. The news showed the FTSE 100 index in the UK plunging 2.5 percent and the Dax index in Germany falling 3.5 percent. Earlier, Asian stocks had also plummeted.
The price of gold, which is seen as a haven asset in times of uncertainty, increased by 2%. Russia supplies over a third of Europe’s oil and about 40% of its gas, with much of it passing via Ukrainian territory via pipelines. It’s no surprise that costs are rising.
Brent crude oil has surpassed $100 per barrel, while wholesale gas prices – where domestic suppliers buy what they need – have also risen dramatically.
Russia’s supplies do not appear to have been harmed – at least not yet. However, the fear that they will be, and that a race for other resources would ensue, is driving up costs.
Investors are concerned about the possible economic impact of high energy prices. As well as the possibility of far broader penalties. Stock markets across Europe are plummeting.
In terms of Russian stocks, a graph depicting the performance of Moscow’s MOEX stock exchange today resembles a cliff in the Ural highlands.