Russian-Ukraine conflict: oil prices soar to highest levels since July 2008

Rising above $139 per barrel at start of trading on Monday, and then easing to around $130, the price of brent crude oil – the global oil benchmark, rose to levels not seen since July 2008.

Meanwhile, the US said it was discussing a potential ban on Russian oil supplies with allies, including European countries.

The price of brent crude rose by more than $20, after it closed at $118.03 per barrel on Friday.

An all-time high of $147.50 was reached in July 2008, with some analysts believing this mark can be surpassed due to the geopolitical impact of the Ukraine crisis.

Meanwhile, US Secretary of State Antony Blinken said the Biden administration, together with its allies on the world stage, were discussing a ban on Russian oil supplies.

In a letter, US House Speaker Nancy Pelosi wrote:

“The House is currently exploring strong legislation that will further isolate Russia from the global economy.”

Fuel Prices

Consumers around the world had been seeing oil prices climb steadily prior to the Russia-Ukraine prices, but have now seen prices reach new highs in recent days.

The cost of petrol and diesel has hit record levels in Europe, with a benchmark Dutch gas price hitting a record high last Wednesday.

Analysts explain that while not all European countries depend on Russia for oil supplies, if countries such as Germany, the biggest consumer of Russian gas, receives less from Russia, it will have to make it up by importing from other countries, such as Norway, which then impacts the supply for the rest of Europe.

Malta has largely managed to stave off the fuel price crisis, with Government crediting a controversial seven-year fixed price agreement with Azerbaijan’s SOCAR Energy, however the country’s fuel purchasing agreements draw to a close this winter.

Despite this, Prime Minister Robert Abela has pledged to keep energy prices stable in Malta. Speaking during a radio interview last month, he said:

“The EU is making arrangements to procure gas from different sources but Malta already has a deal for the provision of LNG that will guarantee a stable price.”

With the hedging agreement due to expire, and a political promise to keep prices sable in Malta, the Government must put aside millions in public funds to cushion the blow and prevent an increase in electricity bills.

According to a Times of Malta report last November, the Government has earmarked around €200 million to cushion the blow of the international increase in price.