By Adedapo Adesanya
The crisis brewing between Russia and Ukraine seems to be favouring Nigeria and other oil-producing countries battling with low revenue from crude oil sales.
This is because the Russia-Ukraine row is pushing prices of the commodity higher at the global market, brightening the revenue prospects of Nigeria and others as there are fears that supply would be disrupted and cause the value to continue to skyrocket.
On Tuesday, the price of the Brent crude oil reached a seven-year high of $99.38 a barrel before moderating to $96.43 per barrel later in the day and as for the West Texas Intermediate (WTI) crude, it settled at $92.27 per barrel.
Both benchmarks had previously hit their highest since September 2014 on with Brent touching $96.78 and WTI reaching $95.82.
The geopolitical tension in Eastern Europe is tipping the scales of the market after Russia ordered troops into two rebel-held regions in Ukraine’s east after it recognised them as independent states.
President Vladimir Putin on Monday said he would recognize the independence of Donetsk and Luhansk which are inside the sovereign state of Ukraine.
Rising tensions have sent jitters through markets especially with Western governments responding with sanctions.
The US and the United Kingdom imposed new sanctions on banks and other entities in Russia, which is the second-largest oil exporter after Saudi Arabia.
Germany also suspended the Russia-led natural gas pipeline project Nord Stream 2.
The country is the endpoint of the project and it has been hesitant in the past to move against the gas pipeline, but the latest escalation seems to have changed its mind.
It still remains that Russia may invade Ukraine as it has built up some 150,000 troops along its border.
The market will continue to monitor a deal aimed at reviving Iran’s 2015 nuclear agreement and this is expected to be very close to being reached, raising the possibility of more than 1 million barrels a day of Iranian crude returning to the market.
Amid this, oil producers under the Organisation of the Petroleum Exporting Countries (OPEC ) and their partners, OPEC+, struggle to pump as much crude as their quotas under the pact allow.
