Oil prices were steady in the early hours of Monday after rising to record highs on the back of Russia’s likely invasion of Ukraine.
Brent crude oil pulled back to $94.02 a barrel as at 1:03 pm Nigerian time on Monday, down from $96.05 per barrel it attained during the Asian trading session. US West Texas Intermediate also pulled back, trading at $91.21 a barrel after rising to $93.21 per barrel in the morning.
The jump in prices was a result of the US announcement that Russia planned to invade Ukraine this week, therefore ordering all its citizens in the Eastern European country to exit immediately. Other countries like the United Kingdom, the Netherland, New Zealand, Australia, etc have also asked their citizens to leave Ukraine immediately.
Oil traders are concerned that a conflict between Russia and Ukraine could disrupt global oil supply amid growing demand for the commodity.
“If Russia invades Ukraine, crude oil and natural gas prices can be expected to surge significantly. In this case, Brent would probably exceed $100 per barrel,” said Commerzbank analyst Carsten Fritsch.
The tensions between the two nations come at a time when members of OPEC plus are struggling to meet targets despite the cartel pledging to increase production by 400,000 barrels per day until March.
“Oil prices are once again coming under tremendous upward pressure as OPEC+ missed its output targets by a high 900,000 barrels in January,” said Pratibha Thaker, the Economist Intelligence Unit’s editorial director for Middle East and Africa.