Oil prices surge over escalating Ukraine-Russia tension

By Sibel Morrow

ANKARA (AA) - Oil prices jumped on Thursday, reaching eight-year highs amid the backdrop of Russia’s invasion of Ukraine, which is raising fears of possible supply disruptions.

International benchmark Brent crude was trading at $99.04 per barrel at 0654 GMT for a 5.30% gain after closing the previous session at $94.05 a barrel.

American benchmark West Texas Intermediate (WTI) traded at $97.09 per barrel at the same time for a 5.42% increase after the previous session closed at $92.10 a barrel.

Both benchmarks posted more than $4 a barrel increase, with Brent briefly hitting over $100 a barrel after reports that Russia launched a full-scale invasion of Ukraine and is targeting key areas in cities with weapons and missiles.

On early Thursday, explosions were reported in several Ukrainian provinces, including the capital Kyiv, and several tanks reportedly crossed the border with Belarus into Ukraine.

In a statement on Thursday morning, the Russian Defense Ministry announced it is using “high-precision weapons” to disable air defense systems, military airports and air forces in Ukraine.

Experts say declining global spare capacity, coupled with monthly OPEC+ production that is lagging behind monthly output targets, is putting an already-tight market under pressure and exposing the market to supply disruptions.

However, according to Timipre Sylva, the petroleum minister of Nigeria, which is also an OPEC member, more output is expected if the ban on Iran’s oil exports is removed following the nuclear talks in Vienna.

-Estimated massive build in US crude stocks limits further increases

Late Tuesday, the American Petroleum Institute (API) announced its estimate of a rise of over 5.98 million barrels in US crude oil inventories relative to the market expectation of a 767,000-barrel increase.

The predicted increase in stockpiles signals a drop in crude demand in the US, the world's top oil consumer, putting downward pressure on oil prices.