THE price of crude oil hit $130 a barrel today, the highest since July 2008, after the US and its European allies considered banning Russian oil imports in response to Russia’s invasion of Ukraine.
According to Reuters, Brent crude futures had risen $12.61, or 10.6%, to $130.72 a barrel by 0449 GMT, while U.S. West Texas Intermediate (WTI) crude had risen $10.41, or 9%, to $126.09.
Intraday highs for both contracts were near record levels in July 2008, when Brent hit $147.50 a barrel and WTI hit $147.27.
Crude oil prices have risen in recent weeks as a result of sanctions imposed by the US and its allies on Russia for its invasion of Ukraine.
Russia is the world’s second-largest oil producer, supplying mostly European refineries with crude. It is also the largest natural gas supplier in Europe, accounting for about 35% of the total supply.
US Secretary of State Antony Blinken said yesterday that the US and its European allies are considering banning Russian oil imports.
“We are now in very active discussions with our European partners about banning the import of Russian oil to our countries, while of course, at the same time, maintaining a steady global supply of oil,” Mr Blinken was quoted by Reuters as saying in an interview on NBC’s “Meet the Press” yesterday.
Reuters quoted the CMC markets analysts as saying, “A boycott would put enormous pressure on oil and gas supply that has already felt the impact of increasing demand.”
“Prices are likely to rise in the short term, with a move toward $150 a barrel not out of the question,” the analyst said.
This increase will benefit, Nigeria, which depends on crude sales for the majority of its revenue.
However, higher prices are likely to cause more problems for the country, as higher prices will make fuel subsidies more expensive, causing Nigerians to pay more for fuel, transportation, and goods.
