Moscow, 3 March 2022 (TDI): As the Western world continues to sanction Russia as it continues its advances into Ukraine, oil and coal prices have reached an all-time high, with further increases expected in the future.
Sanctions disrupt the provision of oil and coal across many regions in the world. Several buyers are struggling to find alternate sources of fuel to meet their needs. Russia is one of the world’s biggest suppliers of coal and accounts for nearly 15% of the global total.
Thermal coal more than doubled within the weak rising 46% in a single day and hitting a record high of $400. Usually, coal prices in Asia fall as winter ends but this has not been the case.
Oil has also seen a steady increase. WTI crude crossed $114 per barrel for the first time since 2011. The increase in oil prices has largely been driven by major oil companies pulling out of Russia.
This includes Shell, BP, and most recently, ExxonMobil. The latter announced that it would abandon all projects in Russia which also includes Sakhalin-1 which will slow down the production of oil considerably.
The organization of Petroleum Exporting Countries (OPEC) announced an increase in its oil production, by 400,000 barrels per day, gradually in April.
In order to stabilize oil prices, many countries around the world including the United States announced they would release a total of 60 million barrels of crude oil from their oil reserves.
This had little to no effect on the market as prices continued to climb. OPEC held a meeting on Wednesday to discuss the state of the global oil market.
The group decided that recent volatility in oil prices was due to prevailing geopolitical situations. The meeting brought forth no productive way to counter the oil price volatility.
Europe has witnessed a recent increase in fuel prices, although natural gas is still following through Russian pipelines to Europe there are concerns that these pipelines could be interrupted putting further pressure on prices.
