Oil Jumps More than $2 on Ukraine War Risk

Monday, March 03, 2014

Risk to oil flows seen low but Russia key supplier; Russian natural gas supply in doubt, European storage levels high. United States, Europe differ over trade sanctions.

Crude oil prices jumped more than $2 a barrel to multi-month highs on Monday, lifted by rising tension in Ukraine after Russian President Vladimir Putin declared he had the right to invade his neighbour.

Ukrainian Prime Minister Arseny Yatseniuk said Moscow's move to use military force was a "declaration of war" by Russia, one of the world's biggest oil producers.

Analysts say Russian supplies of oil to the rest of the world are unlikely to be disrupted by the Ukraine crisis but oil prices rose as most financial markets tumbled, with investors pulling out of riskier assets such as stocks.

Putin secured permission from his parliament on Saturday to use military force to protect Russian citizens in Ukraine and told U.S. President Barack Obama he had the right to defend Russian interests and nationals, spurning Western pleas not to intervene.

Brent crude hit a peak of $111.49 per barrel, its highest since Dec. 31, and was up $2.40 at $111.47 by 1145 GMT.

U.S. crude jumped as much as $2.06 to $104.65 a barrel, the highest since Sept. 23, before easing to $104.40.

"This is all about risk to supplies," said Commerzbank senior oil and commodities analyst Carsten Fritsch in Frankfurt.

"Russia is one of the world's largest oil producers, a huge exporter, and very important to Europe for its energy security."

Ben Le Brun, market analyst at OptionsXpress, agreed:

"Oil markets are reacting on the potential that the situation could worsen," he said.

"But I definitely suspect oil will move much higher, if it actually comes to war. U.S. crude could easily surpass $110 and a $120 target is not out of the question."


The stand-off raised concerns over disruptions of Russian natural gas supplies to Europe, which would see a rise in demand for alternative fuels such as heating oil. The European Union gets roughly a quarter of its gas supply from Russia, mostly piped through Ukraine.

A relatively mild winter in Europe has reduced demand for heating fuel, with storage about 20 percent above last year's level at the main European gas hubs.

Russia exports around 5.5 million barrels of crude oil per day. Piped gas exports beyond the former Soviet Union totalled 15.8 billion cubic meters in January, official data showed.

Global Risk Management analyst Michael Poulsen said it was likely that oil prices would increase slightly further but then stabilise in the short term "before slowly retracing".

Obama and the leaders of Britain, Germany and Poland expressed "grave concern" on Sunday over Russia's intrusion into Ukraine, calling it a breach of international law and a threat to international peace and security.

The tensions come at a nervous time for markets as activity in China's factory sector slowed to an eight-month low in February, a government survey showed, reinforcing signs of a modest slowdown in the world's No. 2 economy as demand weakens.

The situation in Ukraine pressured Asian stocks on Monday, forcing anxious investors to cut their exposure to riskier assets in favour of traditional safe-haven bets such as the Japanese yen and Swiss franc.

By Christopher Johnson


Maritime Reporter September 2015 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

Woman Medevaced from Cruise Ship off SouthWest Pass

The Coast Guard medevaced a 50-year-old woman from a cruise ship 225 miles southeast of Southwest Pass, Saturday. Watchstanders at Coast Guard District 8 received a call at approximately 9 a.

Demands for Icebreaker Tours Spiral

Plans to terminate commercial tours to the North Pole on the nuclear-powered icebreakers of the Atomflot company in 2016 have surged the demand for these tours.

New Chair for Townsville Port

The Palaszczuk Government has appointed one of Queensland’s most respected businesswomen, Renita Garard as the new Chair of the Port of Townsville. In a statement released earlier today,


Demands for Icebreaker Tours Spiral

Plans to terminate commercial tours to the North Pole on the nuclear-powered icebreakers of the Atomflot company in 2016 have surged the demand for these tours.

Teekay LNG Partners Declare Distribution

Teekay GP LLC, the general partner of Teekay LNG Partners L.P. has declared a cash distribution of $0.70 per unit for the quarter ended September 30, 2015. The

TMS Cardiff Gas Orders First LPG Carriers

TMS Cardiff Gas Ltd. has signed a contract with Hyundai Heavy Industries of Korea for the construction of two 78,700 cbm LPG carriers with the option to build another two.

Government Update

New Jersey Transportation Chief to Resign

New Jersey Governor Chris Christie on Friday said his transportation commissioner Jamie Fox would step down by the end of the month to return to the private sector after only a year in the position.

Brazil Court Allows Lula Questioning in Petrobras Corruption Case

Brazil's Supreme Court authorized the questioning by Federal Police of ex-President Luiz Inácio Lula da Silva as a witness in a broadening corruption case focused

USCG Urge Caution Ahead of Hurricane Joaquin

The Coast Guard urges the public Thursday to use extreme caution and to prepare for the onset of heavy weather, extreme sea conditions, storm surge and high

Offshore Energy

Kruszewski Joins Braemar Engineering

Braemar Engineering, the specialist maritime engineering consultancy, today announced the appointment of Chis Kruszewski to the role of Senior Electrical Engineer in its Offshore,

RigNet Partners Inmarsat to Offer Fleet Xpress

RigNet, Inc., a global provider of remote managed offshore communications solutions, telecoms systems integration services and collaborative applications to the oil and gas industry,

Ulstein Systems Ordered for New Rock Installers

Ulstein Power & Control announced it has been contracted by Chinese shipbuilder AVIC Weihai Shipyard Co. Ltd. to deliver power and control for two subsea rock installation

Maritime Careers / Shipboard Positions Maritime Contracts Maritime Security Naval Architecture Navigation Pipelines Ship Repair Shipbuilding / Vessel Construction Sonar Winch
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.2314 sec (4 req/sec)