Oil costs surge as Russia-Ukraine disaster escalates
The oil and fuel terminal on the Port of Odessa in Odessa, Ukraine, on Saturday, Jan. 22, 2022.
Christopher Occhicone | Bloomberg | Getty Photographs
Russia has constructed up some 150,000 troops alongside its border with Ukraine, and the Biden administration mentioned final week that as many as 7,000 extra troops have joined.
The army tensions have sparked issues that Russia could also be getting ready to invade Ukraine, triggering fears of a repeat of the Kremlin’s unlawful annexation and occupation of Crimea in 2014.
Crude costs not too long ago crossed $90 per barrel, representing a rise of greater than 20% this yr and a rally of greater than 80% for the reason that starting of 2021. These good points, nonetheless, can be attributed to different components akin to tight provide.
Katrina Ell, senior APAC economist at Moody’s Analytics, mentioned the agency estimated geopolitical tensions have added about $10 to $15 per barrel to grease costs.
“So if we proceed to see tensions escalate [causing] varied provide disruptions to Russia’s oil and fuel provides, then that can proceed so as to add upward strain to grease costs after which actually harm Asia’s largest economies from a manufacturing standpoint and from a consumption standpoint as properly,” she advised CNBC’s “Squawk Field Asia” on Tuesday.
Ell added that almost all of Asia’s largest economies are web oil importers.