The price of crude oil hit $130 per barrel on Monday, the highest since July 2008, after the United States and its European allies considered prohibiting the importation of Russian oil in response to Russia’s invasion of Ukraine.
Brent crude futures were up $12.61, or 10.6%, to $130.72 a barrel by 0449 GMT, while West Texas Intermediate (WTI) crude was up $10.41, or 9%, to $126.09, according to Reuters.
Monday’s intraday highs are close to the records set for both contracts in July 2008, when Brent reached $147.50 per barrel and WTI reached $147.27.
Crude oil prices have risen in the last week as a result of sanctions imposed by the United States and its allies on Russia for its invasion of Ukraine.
Russia is the world’s second-largest producer of oil.
It primarily sells crude to European refineries. It is also the largest supplier of natural gas to Europe, accounting for approximately 35% of total supply.
On Sunday, US Secretary of State Antony Blinken stated that the US and its European allies are considering a ban on Russian oil imports.
“We are now in very active discussions with our European partners about prohibiting the import of Russian oil into our countries while, of course, maintaining a steady global supply of oil,” Mr Blinken said on NBC’s “Meet the Press” show on Sunday, according to Reuters.
According to CMC markets analysts, “a boycott would put enormous pressure on oil and gas supply, which has already felt the impact of rising demand.”
“Prices are likely to rise in the near term, with a move toward $150 per barrel not ruled out.”
The increase is good news for Nigeria, which derives the majority of its revenue from crude sales. However, it is certain to cause more problems for the country because higher prices will make fuel subsidies more expensive, potentially forcing Nigerians to pay more for fuel, transportation, and goods.