Oil price surpassed $95 per barrel amid lack of supply and the ongoing tensions between Russia and Ukraine
By Eugene Onyeji
Brent crude, the international oil benchmark, surged past $95 a barrel on Friday to hit its highest level for the first time since 2014.
The development is a sharp reaction of the world oil industry to the rising tension between Russia and Ukraine, with the US leading a North Atlantic Treaty Organisation (NATO) to play a major role in the buildup.
During a White House briefing, Jake Sullivan, United States National Security Advisor, said that there were signs of Russian escalation at the Ukraine border and the possibility of an invasion during the Olympics.
“We continue to see signs of Russian escalation, including new forces arriving at the Ukrainian border. As we’ve said before, we are in the window when an invasion could begin at any time,”
“We are not saying that a decision has been taken — that a final decision has been taken by President Putin,”
“An invasion could begin at any time should Vladimir Putin decide . . . it could begin during the Olympics, despite a lot of speculation that it will only happen after,” Sullivan said on Friday.
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Oil prices have climbed steadily over the past two years as global demand has recovered more quickly than supplies from the pandemic-driven downturn, pushing down inventories.
The global benchmark, the Brent crude futures ended the week trading $94.44, up 1.25% for the week, after gaining 3.31% on Friday. The United States’ benchmark, the West Texas Intermediate crude ended the week trading $93.10, up 0.86% for the week, after gaining 3.58% also on Friday.
Earlier this week, JPMorgan projected that oil price could easily reach $120 per barrel if Russia invaded Ukraine and the US and other nations sanctioned Russia’s oil and natural gas exports, with many countries, including the US and the United Kingdom urging their citizens to leave Ukraine over Russian invasion fears.
The rise in global crude oil prices should portend an upturn for Nigeria’s revenue — but subsidy payments shortchanged the government, apart from the fact that virtually all the refined products are imported.
Petrol subsidy payments gulped N1.43 trillion in 2021, shrinking revenue accrued to the federation account to N542 billion — a shortfall from the projected N2.51 trillion.
The details are contained in the Nigerian National Petroleum Corporation (NNPC) presentation to the Federation Account Allocation Committee (FAAC) meeting between January 19 and 20, 2022.
In the 2022 budget signed into law by President Muhammadu Buhari last year December, the provision of petrol subsidy was till June 30, but NLC said fuel subsidy removal at this period of high inflation would be resisted.
In seeking a soft landing based on outcry from Nigerians, the Federal Government suspended indefinitely its planned fuel subsidy removal and will now amend the 2022 Appropriation Act to accommodate the new change to provide for subsidy payments from July 1, saying it is clear that the situation of the country does not allow for that at the moment.
Ahead of the 2023 elections, the federal government is confronted with policies and politics of fuel subsidy removal despite provisions for deregulation in the Petroleum Industry Act.