Oil Surges On Fears Of Supply Disruptions Amid Ukraine-russia Tensions

The Ukraine-Russia crisis is causing oil and gas prices to rise across the globe on fears of disruption.

Tuesday, the price of Brent crude oil reached a seven-year high of $99.38 per barrel (£73).

After hitting a record 149.12p a liter on Sunday, the RAC said the crisis would continue to increase petrol prices.

In recognition of these two regions' independence, Russia sent troops into both rebel-held areas in Ukraine's east.

The FTSE 100 opened more than 1.4% lower in London before turning positive.

However, Asian stock markets ended lower, and US stock market indices also declined.

There have been threats of sanctions against Russia, which is the second biggest oil exporter after Saudi Arabia. Russian natural gas is world's number one producer.

In a landmark decision, Olaf Scholz has blocked the certification of the Nord Stream 2 pipeline that would have been a direct pipeline from Russia to Germany.

Following this, UK wholesale gas prices soared 9% in April and 10% in May to 191p per therm.

The price still remains far below its December peak of 400p per therm.

Manulife Investment Management's Sue Trinh believes sanctions against Russia would have "substantial implications" on global oil prices.

More than 10% has been added to oil prices since February 1st, after months of steady increases.

Fidelity International investment director Maike Currie said a combination of the Ukrainian crisis, a cold winter in the United States, and a lack of investment in oil and gas supplies could lead to oil prices exceeding $100 a barrel.

"Russia accounts for approximately one out of every ten barrels of oil consumed globally; it is therefore a major factor in the rising price of oil, which will have a direct impact on consumers," she said.

The United Kingdom does not import most of its oil and gas from Russia, but if Russian supplies are limited, wholesale prices will probably rise.

With tensions on the rise, petrol prices hit a new high Sunday of 149.12p a liter before dropping again on Monday to 149.03p, the RAC reported.

Prices on Monday were 152.51 pence per liter, just a bit lower than Sunday's record of 152.58 pence.

As a result of Russia's invasion of Ukraine, fuel prices are already rising and will undoubtedly rise to a grim milestone of £1.50 a liter [of unleaded petrol] over the next few years, said RAC fuel spokesman Simon Williams.

The UK's drivers who struggle to afford fuel will be disappointed by this development."

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