By Adewale Sanyaolu
Amid heightened tensions between Russia and Ukraine, the international oil benchmark, Brent crude, rose above $100 per barrel, yesterday, the first since 2014.
Brent crude, against which Nigeria’s oil is priced, hit a fresh eight-year high of $103.43 per barrel as of 4:39pm Nigerian time, Thursday.
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The $103.43 per barrel oil price, traded above $40, a figure which is higher than the Federal Government’s oil benchmark price of $62 per barrel for the 2022 budget and oil production of 1.88 million barrels per day.
Regrettably, most of the gains recorded during a higher oil price regime are frittered away through refined fuel importation as Nigeria imports 100 per cent of its petroleum products needs due to the dysfunctional state of its four refineries located in; Port Harcourt, Warri and Kaduna. Crude oil prices were on the rise on Thursday morning as Russia engaged in a “special military operation” in Ukraine. The price of Brent crude oil is now well over $105 per barrel for the first time since July 2014.
The price of Brent crude reached $104.99 per barrel – up $8.15 (+8.42%) on the day. The price of West Texas Intermediate(WTI) crude oil had reached $100 before falling back to 99.52 up $7.42 per barrel (+8.06%) as Russian forces made their way into Ukraine in a show of force not seen in Europe since World War II in a multi-pronged attack.
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Russian President Vladimir Putin, announced a “special military operation” against Ukraine early on Thursday morning after recognising the separatist regions of Lugansk and Donetsk earlier in the week. This drew the ire of the West, which responded with sanctions, including on a company building Nord Stream 2, expected to increase gas supplies to Germany and parts of western Europe.
Ukrainian Foreign Minister Dmytro Kuleba, said that Putin had “launched a full-scale invasion of Ukraine.” Meanwhile, Putin said Russia is merely protecting the citizens of eastern Ukraine after the United States ignored Russia’s request to keep Ukraine from entering NATO.There are reports of missiles falling on Ukrainian cities, with explosions near Kyiv, and Ukraine is reporting that columns of troops are flooding into eastern Ukraine. Russia has also landed by sea in Odesa and Mariupol.
Ukraine has said that military command centers have been hit. Putin said his goal was not to occupy Ukraine.
Ukraine has declared martial law, with Ukraine president Volodymyr Zelenskiy calling on Ukrainians to defend the country on the cities’ streets, and offering to arm any citizens willing to join the fight.
Meanwhile, the United States has said that the sanctions it is imposing on Russia for recognizing two breakaway regions in eastern Ukraine and sending troops there are not targeting Russian oil and gas flows, nor will they target such flows in subsequent sanctions that could be imposed in the near future.