Oil prices climbed about 1 percent on Friday as the intensifying war in Ukraine this week boosted the market’s geopolitical risk premium.
Brent crude futures rose 94 cents or 1.3 percent to settle at $75.17 a barrel and the US West Texas Intermediate (WTI) crude rose $1.14, or 1.6 percent to settle at $71.24.
The rise came as Russia stepped up its Ukraine offensive after Britain and the US allowed Ukraine to strike deeper into Russia with their missiles.
Market analysts warned that the Russia-Ukraine escalation has raised geopolitical tensions beyond levels seen during the year-long conflict between Israel and Iran-backed militants.
Russia, an oil-producing country, fired the missile into Ukraine, prompted by Ukraine’s use of US ballistic missiles and British cruise missiles to hit Russia. This came after President Mr Vladimir Putin said it would keep testing its new hypersonic missile in combat and had a stock ready for use.
There are fears that there might be accidental destruction in any part of oil, gas and refining that causes long-term damage and worsens the war.
In a related development, the US imposed new sanctions on Russia’s Gazprombank as President Joe Biden stepped up actions to punish Russia for its invasion of Ukraine before he leaves office on January 20.
In response, the Russian government sidestepped the latest US sanction, saying it was an attempt to hinder the export of Russian gas, adding that it would find a solution to the challenge.
The market continues to weigh the latest move by China, the world’s biggest oil importer after it announced policy measures this week to boost trade.
Some of the measures include support for energy product imports, which came amid worries over US President-elect Donald Trump’s threats to impose tariffs on the country.
For China, there are signs that its crude oil imports will rebound in November.
Oil imports also increased in India, the world’s third-biggest oil importer, as domestic consumption increased.
Meanwhile, the US Dollar jumped to a two-year high versus a basket of other currencies on Friday. A stronger Dollar makes oil more expensive in other countries, which can reduce demand.
