Oil tops $105/bbl after Russia attacks Ukraine

By Stephanie Kelly

NEW YORK (Reuters) – Oil prices jumped on Thursday, with Brent rising above $105 a barrel for the first time since 2014, after Russia’s attack on Ukraine exacerbated concerns about disruptions to global energy supply.

Russia launched an all-out invasion of Ukraine by land, air and sea in the biggest attack by one state against another in Europe since World War Two.

U.S. President Joe Biden unveiled harsh new sanctions against Russia, imposing measures to impede it’s ability to do business in the world’s major currencies along with sanctions against banks and state-owned enterprises.

Britain announced new measures targeting banks, members of Putin’s inner circle and the very wealthy who enjoy high-rolling London lifestyles. UK Prime Minister Boris Johnson said that the West must end its reliance on Russian oil and gas.

Global benchmark Brent crude rose $2.35, or 2.4%, to $99.19 a barrel by 2:22 p.m. ET (1922 GMT), after touching a high of $105.79.

U.S. West Texas Intermediate (WTI) crude rose 66 cents to $92.76 a barrel, after earlier rising to $100.54.

Brent and WTI hit their highest since August and July 2014 respectively.

Later in the session, prices eased after President Joe Biden said the United States would release additional oil from the nation’s Strategic Petroleum Reserve (SPR) as warranted.

The news around the SPR is “having a psychological impact, but whether there is a real impact will take a few weeks to determine,” said Phil Flynn, senior analyst at Price Futures Group in Chicago.

Russia is the third-largest oil producer and second-largest oil exporter, said UBS analyst Giovanni Staunovo. “Given low inventories and dwindling spare capacity, the oil market cannot afford large supply disruptions,” he added.

Russia is also the largest provider of natural gas to Europe, providing about 35% of its supply.

At least three major buyers of Russian oil were unable to open letters of credit from Western banks to cover purchases on Thursday, sources told Reuters.

China warned of the impact of tensions on the stability of the energy market.

“All countries that are truly responsible should take responsible actions to jointly maintain global energy security,” a Chinese foreign ministry spokesperson said.