Russia-Ukraine crisis: Oil surges above $100 for first time since 2014

Oil prices surged, with Brent breaching $100 a barrel for the first time since 2014 on Thursday as Russia attacked Ukraine, exacerbating concerns that a war in Europe could disrupt global energy supplies.

After Russian President Vladimir Putin authorised what he called a special military operation, Ukraine's Foreign Minister Dmytro Kuleba said in a tweet that Russia had launched a full-scale invasion of Ukraine and was targeting cities with weapons strikes. read more

Brent crude hit a high of $102.48 a barrel, the loftiest since September 2014, and was at $102.06 a barrel at 0547 GMT, up $5.22, or 5.4 per cent. US West TexasI ntermediate (WTI) crude futures jumped $4.85, or 5.3 per cent, to $96.95 a barrel, after rising to as much as $97.40, the highest since August 2014.

Oil prices have surged more than $20 a barrel since the start of 2022 on fears that the United States and Europe would impose sanctions on Russia's energy sector, disrupting supplies.

Russia is the world's second-largest oil producer, mainly selling its crude to European refineries, and is the largest supplier of natural gas to Europe, providing about 35 per cent of the latter's supply.

"Russia's announcement of a special military operation into Ukraine has pushed Brent to the $100/bbl mark," said Warren Patterson, head of ING's commodity research.

"This growing uncertainty during a time when the oil market is already tight does leave it vulnerable, and so prices are likely to remain volatile and elevated," he added.

Western nations and Japan on Tuesday punished Russia with new sanctions for ordering troops into separatist regions of eastern Ukraine, and threatened to go further if Moscow launched an all-out invasion of its neighbour. So far, there are no sanctions on energy trade.

"It's not just geopolitical risk that is the problem but the further straining of supply," OCBC economist Howie Lee said.

"Russian oil supply will disappear overnight if faced with sanctions ... and Opec can't produce fast enough to cover this gaping hole."

Gasoline inventories rose by 427,000 barrels and distillates stockpiles fell by 985,000 barrels, the API data showed according to the sources, who spoke on condition of anonymity.