By Adedapo Adesanya
Crude oil prices skyrocketed on Thursday morning after Russia finally invaded Ukraine, with Mr Vladimir Putin asking the Ukrainian forces to lay down their arms.
Over the past few days, there have been fears that Russia was planning to enter Ukraine but the country has constantly played down an invasion, saying the warnings were anti-Russian hysteria.
In the early hours of today, this became a reality as rockets hit some parts of Ukraine, causing the price of crude oil to rise in the global market.
The Brent crude hit $102.42 per barrel this morning, with the United States West Texas Intermediate (WTI) trading at $97.11 a barrel on the back of supply shortage fears.
Yesterday, Ukraine declared a state of emergency and told its citizens in Russia to flee, while Russia began evacuating its Kyiv embassy in the latest signs for Ukrainians who fear a Russian invasion.
Prices had risen on Tuesday after Western nations imposed sanctions on Russia after its military were deployed into two breakaway regions in eastern Ukraine.
Russia’s President Vladimir Putin signed a decree on Monday recognizing the independence of the two eastern Ukrainian regions of Lugansk and Donetsk and ordered army forces to enter them for peacekeeping purposes.
Sanctions imposed by the United States, the European Union, Britain, Australia, Canada and Japan were focused on Russian banks and elites, while Germany halted certification of a key gas pipeline from Russia.
Market analysts expect oil prices to continue seeing support from the Russia-Ukraine crisis, with some Western countries promising to impose more sanctions if Russia launches a full invasion.
Also, the potential return of more Iranian crude to the market weighed on prices, as Tehran and world powers inch closer to reviving a nuclear agreement.
A top Iranian minister said the talks were reaching a sensitive and important point even as analysts say there is little chance of Iranian crude returning to the market in the immediate future to ease current supply tightness.
On the supply front, the Organisation of the Petroleum Exporting Countries and its allies, OPEC+ signal that there were no plans to accelerate production growth despite soaring prices.
OPEC has been consistently failing to reach its quota, led by countries including Iraq and Nigeria due to continued underinvestment, which has affected spare capacity.
Modupe Gbadeyanka