Oil prices rocket to ten-year high due to supply woes in Russia

By Ishika Dangayach on Mar 03, 2022 | 05:33 AM IST

• Brent crude tops $119 for the first time since May 2012 after a 6.1 % jump

• OPEC+ will boost supply by 400,000 barrels per day in April compared to March

Oil prices continue to surge on Thursday, with global benchmark Brent crude moving towards $12O per barrel reaching its highest level in years, due to significant interruptions in Russian crude supplies as Moscow's invasion of Ukraine intensifies.

Brent crude, the global standard, hit a record high of $119.84 per barrel, the highest level since May 2012. The contract climbed 3.90 % to $117.32 per barrel around 4:22 AM ET.

West Texas Intermediate crude futures touched a high of $116.57 a barrel, the most since September 2008. The contract climbed 3.34 % to $114.11 per barrel around 4:22 AM ET.

Early trade showed Brent crude surged over .64 % to $110.83 per barrel during Wednesday’s session. US WTI crude futures gained 5.4 % to trade at $109.08 per barrel.

Following Russia's invasion of Ukraine last Thursday, crude prices initially exceeded $100, raising worries of supply interruptions from important exporter Russia, which ranks third in global oil output in an already tight market.

The rise in prices came after the United States imposed further sanctions on Russia's oil refining sector, raising fears that Russian oil and gas exports may be next on the list.

OPEC and its allies stated on Wednesday that despite the sharp rise in oil prices that has driven prices far above $100, they will boost supply by 400,000 barrels per day in April compared to March.

WTI and Brent are already up more than 40% year to date, indicating that demand is picking up while supply remains tight.

Moreover, the International Energy Agency's member governments announced plans to release 60 million barrels of oil reserves on Tuesday to slow the rise in oil prices. The US will release 30 million barrels as part of this.

Picture Credits: FT

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