Amid Russia-Ukraine Crisis, Crude Oil Hits $100 Mark For First Time Since 2014

New Delhi: Amid the tension between Russia and Ukraine, the prices of crude oil rose to $100 a barrel for the first time since 2014.

Notably, Russia is the world's second largest oil producer, selling crude mainly to European refineries, and the largest supplier of natural gas to Europe, sending about 35% of its supply.

According to Reuters report, Brent crude hit a high of $101.34 a barrel in early Asia trade, the highest since September 2014. U.S. West Texas Intermediate (WTI) crude futures jumped $4.22, or 4.6 per cent, to $96.32 a barrel, after rising to as much as $96.51, also the highest since August 2014.

However, presently, the Ukraine-Russia crisis is responsible for the rise in crude oil. But apart from this, there are several factors which can keep the prices higher. These bullish drivers also included a strong growth in global oil demand, which exceeded pre-Covid levels this year.

The current crisis also assumes significance for India, as it is dependent on imports to meet its crude oil requirements. A rise in crude oil prices may push up domestic prices, leading to inflation.

"It's not just geopolitical risk that is the problem but the further straining of supply," OCBC economist Howie Lee was as saying by Reuters.

"Russian oil supply will disappear overnight if faced with sanctions... and OPEC can't produce fast enough to cover this gaping hole," he added.

What are the 4 main types of crude oil?

1: Very light oils – Jet Fuel, Gasoline, Kerosene, Petroleum Ether, Petroleum Spirit, and Petroleum Naphtha are fall in this category. It is believed to be very volatile, evaporating within a few days which in turn evaporate their toxicity levels.

2: Light oils – Grade 1 and Grade 2 Fuel Oils, Diesel Fuel Oils as well as Most Domestic Fuel Oils are fallin in this catgeory. They are both moderately volatile and toxic.

3: Medium oils – Medium Oils are generally volatility and a higher viscosity higher viscosity. In other words, these are the most common types of Crude Oil.

4: Heavy fuel oils – These include the heaviest Grade 3,4,5 and 6 Fuel Oils along with Heavy Marine Fuels. These are least volatile Crude Oils as well as the most toxic.

What Is OPEC?

Organization of the Petroleum Exporting Countries (OPEC), an intergovernmental organization of 13 major oil producing countries, which together produce about 40% of the world's crude. Internationally, OPEC oil exports represent about 60% of the total petroleum traded.

OPEC ensures efficient, economic and regular supply of petroleum products for the use of various countries. The OPEC countries are Iran, Iraq, Kuwait, Libya, United Arab Emirates, Saudi Arabia, Algeria, Nigeria, Gabon, Angola, Equatorial Guinea, Venezuela and Congo.

The organization was founded at the Baghdad Conference on September 10–14, 1960. Its headquarter is located in Vienna.

Also read: Russia-Ukraine tensions keep crude elevated; negative for net importers

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