As the conflict in Ukraine continues, oil prices have climbed to a 13-year high.
The price of a barrel of Brent crude oil rose to more than $139 per barrel before subsiding to roughly $130. It was the highest price for crude seen since July 2008.
Brent crude actually jumped in price by over 20 per cent over the course of last week, with another increase of around 12 per cent in price likely to come soon according to James Spencer, managing director of fuel delivery company, Portland Fuel.
The price rises come amid supply fears which have been sparked by Russia’s military offensive in Ukraine, with the average cost of petrol and diesel in the UK now standing at £1.53 and £1.57 per litre, respectively.
Spencer said: “Even if we can get extra supplies on to the market, nothing will happen quickly. I'm afraid we are going to see prices in excess of £1.70 to £1.75 a litre.”
Meanwhile, the US secretary of state, Antony Blinken, has said that the White House is in discussions with allied countries about a potential embargo on Russian oil, which would have major repercussions for the global economy.
Nancy Pelosi, speaker of the US House of Representatives, also said that the House was “exploring” legislation that would ban Russian oil imports.
In a written letter, Pelosi said: “The House is currently exploring strong legislation that will further isolate Russia from the global economy.”
However, there are concerns from within Europe that should the continent follow suit with the US and implement a Russian oil embargo, Moscow could respond in kind by suspending natural gas supplies.
Vandana Hari from oil markets analysis firm, Vanda Insights, told the BBC: “While the US might just push through a ban on Russian oil imports, Europe can ill-afford to do the same. More worryingly, [Russian president Vladimir] Putin, with his back to the wall, could turn off gas supplies to Europe, cutting off the continent's energy lifeline.”
The Biden administration is expected to hold talks with Saudi Arabia on increasing its production of crude oil this week to guarantee supply in the event of an embargo on Russia.
Household energy bills have also been pushed up by the Ukraine conflict, with gas prices in Europe and the UK hitting record levels and igniting concerns that average UK household energy bills could soar to as high as £3,000.
While scores of global firms have been cutting ties with Moscow, energy giant Shell has been forced to defend a decision to purchase a shipment of Russian crude oil for a lower price, which it said was a “difficult” call but insisted that it had had “no alternative”.
Photo by Erik Mclean on Unsplash
