Oil passes $100 for first time in 7 years after Putin attacks Ukraine

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The price of oil on Thursday (24) exceeded US$ 100 for the first time in more than seven years, after Russian President Vladimir Putin announced a military operation to “protect the people of the Donbass”, the region of east of the neighbour, in which he recognized pro-Russian rebel areas on Monday (21).

A barrel of Brent hit $100.04 after the announcement, which intensified fears of a full-scale conflict in Eastern Europe. WTI oil was quoted at $95.54 a barrel.

There is no sign of a full-scale invasion so far, but CNN TV crews heard explosions in the distance in the Ukrainian capital Kiev and the main nearby Donbass city of Kharkiv.

Everything indicates that the Russians are bombing positions in the eastern area that are within the former borders of Donetsk and Lugansk, the provinces that today have less than half of their territory dominated by Putin’s allies.

The threat of a conflagration has unleashed fears about supplies of key commodities such as wheat and metals amid rising demand as economies reopen after pandemic-induced closures.

“Russian-Ukrainian tensions trigger a possible demand shock [na Europa] and a bigger supply shock to the rest of the world, given the importance of Russia and Ukraine to (the energy) sector,” said Tamas Strickland of the National Australia Bank.

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