Oil prices touched $90 a barrel for the first time in seven years on Wednesday amid tightening supplies and rising political tensions between Ukraine and Russia.
The volatility has raised concerns about further disruption in an already-constrained market.
Brent Crude prices rose to 2.54 per cent to $90.44 per barrel on Wednesday night, the first time prices have broken the $90 threshold since October 2014.
WTI is enjoying a similarly upward trajectory, soaring 2.69 per cent to $87.90.
Earlier this week, US President Joe Biden said he would consider personal sanctions on Vladimir Putin if Russia invades Ukraine.
He warned there would be “enormous consequences” for the world if Russia made a move on the nation, which sits on its south-western border.
The Kremlin has positioned over 100,000 troops near the countries borders and has been locked in talks with the White House in recent weeks, pushing for NATO to rule out eastward expansion/
Russia has also accused the US and others of “escalating tensions” after it confirmed plans to fly 8,500 troops into Europe, and denies planning to enter Ukraine.
Meanwhile, OPEC+ continues to miss its raised production targets while analysts suspect continued under investment in the sector could exacerbate issues from tightening supplies,
Craig Erlam, senior markets analyst at OANDA, is now bullish about oil reaching the hsitoric $100 threshold.
He said: “So immediately it becomes a question how long we’ll be waiting for triple figures. The supply/demand dynamics remain favourable and the potential for conflict in Ukraine can only be supportive, as additional risk premiums are priced in. It’s still unlikely that oil and gas will be used as a weapon any time soon but if it was, it could lead to a serious surge in prices given how tight the markets are.”