The price of crude oil on Monday hit $130 a barrel, the highest since July 2008, after the United States and European allies considered banning the importation of Russian oil in protest against Russia’s invasion of Ukraine.
Brent crude futures jumped $12.61, or 10.6 per cent, to $130.72 a barrel by 0449 GMT, while U.S. West Texas Intermediate (WTI) crude climbed $10.41, or 9 per cent, to $126.09,” Reuters reported.
Monday’s intraday highs are near record levels seen for both contracts in July 2008 when Brent hit $147.50 a barrel and WTI touched $147.27.
Over the past week, the prices of crude oil rose after the United States and its allies sanctioned Russia over the invasion of Ukraine.
Russia is the world’s second-largest oil producer, mostly selling its crude to European refineries. It is also the largest supplier of natural gas to Europe, providing about 35 per cent of the supply there.
On Sunday, the U.S. Secretary of State Antony Blinken said the U.S. and its European allies are exploring banning Russian oil imports.
“We are now in very active discussions with our European partners about banning the import of Russian oil to our countries, while of course, at the same time, maintaining a steady global supply of oil,” Mr Blinken was quoted by Reuters as saying in an interview on NBC’s “Meet the Press” show on Sunday.
Reuters quoted the CMC markets analysts as saying, “A boycott would put enormous pressure on oil and gas supply that has already felt the impact of increasing demand.”
“Prices are likely to rise in the short term, with a move toward $150 a barrel not out of the question,” the analyst said.
The rise is good news for Nigeria which relies on crude sales for most of its revenue. However, it is bound to create more problems for the country as higher prices will make fuel subsidies more expensive, with the likelihood of Nigerians having to pay more for fuel, transportation and goods.