New Delhi: Oil rose to its highest level since 2014 on Tuesday after Moscow ordered troops to two division zones in eastern Ukraine, adding to concerns that were pushing up prices to $ 100 a barrel.
Germany puts certification of the Nord Stream 2 pipeline from Russia on ice while the United States and the European Union discuss potential sanctions as Ukraine reports a continuing shell in eastern Ukraine.
“The capacity for a conference over $ 100 a barrel has received a huge boost,” said Tamas Varga of PVM oil broker. “Those who bet on such a move anticipate the escalation of the conflict.”
Brent crude, global index, was $ 1.93, or 2%, at $ 97.32 by 1448 GMT, previously reaching its highest level since September 2014 at $ 99.50.
US West Texas Intermediate (WTI) crude jumped by $ 2.96, or 3.3%, from Friday to $ 94.03, with the market closing on Monday for public holidays. WTI also touched a seven-year high on Tuesday as it peaked at $ 96.
“The oil market is experiencing a period of frothiness and nervousness, fueled by geopolitical fears and emotions,” said analyst Julius Baer Norbert Rucker.
“Given the volatility, oil prices could likely climb three times higher in the near term.”
Ukraine crisis has added further support to the oil market which has pressed on strict supplies as demand recovers from the COVID-19 pandemic.
The Organization of the Petroleum Exporting Countries (OPEC) and its partners, together as OPEC +, have opposed calls for increased supply.
A British prime minister on Tuesday said Russia’s move to Ukraine had created a shadowy situation like the 1962 Cuban missile crisis, when a war between the United States and the Soviet Union brought the world to the brink of a nuclear war.
Nigeria’s oil minister on Tuesday stood by OPEC + saying more supply was not needed, pointing to the prospect of more production from Iran if its nuclear deal with world powers is revived.
Discussions continue over the renewal of Iran’s nuclear deal with world powers, which could eventually boost Iran’s oil exports by more than 1 million barrels per day.