Oil prices soar over supply chain disruption due to Ukraine crisis

Oil prices

Concerns over potential supply interruptions following Russia’s invasion of Ukraine and subsequent sanctions drove up oil prices on Tuesday, outweighing talks of a coordinated global crude stock release.

By 0843 GMT, May Brent crude futures had risen $3.04, or 3.1 percent, to $101.01 a barrel. After the invasion began last week, the benchmark reached a seven-year high of $105.79.

April West Texas Intermediate (WTI) crude futures in the United States were up $2.56, or 2.67 percent, to $98.28. The contract hit a high of $99.10 a barrel the day before, rising by more than 4%. 

Following the failure of peace talks between Russia and Ukraine on Tuesday, a large Russian military convoy neared Kyiv, Ukraine’s capital.

The world’s largest shipping company, Maersk, announced on Tuesday that it would cease container transport to and from Russia, further aggravating Russia’s economic isolation.

Brent crude prices increased 0.91 percent to $98.86 per barrel on Tuesday.

Palm oil has surpassed sunflower oil as the most expensive of the four major edible oils for the first time, as buyers scramble for replacements after Russia’s invasion of Ukraine stopped shipments from the top exporting Black Sea region.

In India, palm oil has risen to a historic premium over soy oil. Because of the dry weather, soybean production in Argentina, Brazil, and neighboring nations is likely to decline.

The euro opened substantially down yesterday as traders tried to assess the impact of Russian sanctions and the current war clouds hanging over Ukraine.

In Asia on Tuesday morning, the dollar was higher. After plunging to a historic low, the rouble has stabilized somewhat.

The situation in Russia-Ukraine will remain a critical risk factor for the time being, even if market sentiment improves.

The USD/JPY exchange rate increased by 0.14 percent to 115.16. The AUD/USD exchange rate fell 0.01 percent to 0.726. Overnight, benchmark 10-year rates in the United States fell to an almost one-month low.

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