Oil prices shoot amid Russia -Ukraine crisis

Oil prices have shot up on fears that rising tensions between the Ukraine and Russia could disrupt supplies around the world.

The surge may cause a rise in the product in the country as the regulatory commission revise the cost of petrol, diesel and kerosene mid next month. Brent, the international benchmark for oil, is now trading at Ksh.11,372.01 a barrel, its highest level since 2014.

On January 25, oil prices rose on worries about supply disruption amid rising tensions in Eastern Europe and the Middle East.

The then uptick in oil price was on the back of the United Arab Emirates’ interception when it destroyed two Houthi ballistic missiles targeting the Gulf country.

The crisis over Ukraine has added further support to an oil market that has surged due to tight supplies as demand recovers from the coronavirus pandemic.

The Organization of the Petroleum Exporting Countries (OPEC) has resisted calls to boost supply more rapidly.

The conflict has fueled a seven percent increase in natural gas prices despite assurances from Putin that Russia will continue to deliver uninterrupted natural gas supplies to world markets.

Russia is the world’s largest exporter of natural gas and produces 12 percent of the world’s oil and Kenya being a major importer of petroleum products means that higher oil prices will increase the demand for a US dollar.

Ongoing tension in two Eastern Europe nations has already seen the Shilling weaken further to trade at Ksh.114.7 against the dollar.

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