The Russia-Ukraine crisis situation has spurred Brent crude – the global oil benchmark – to rise to above $139 a barrel, before easing to around $130, the highest since 2008.
Russia, behind the United States and Saudi Arabia, produces 11 million barrels of oil per day, making it the world’s third-largest producer. The country exports between 5 and 6 million barrels of petroleum per day, with almost half of that going to Europe. According to many analysts, if the West bans Russian oil, international crude prices could skyrocket to as high as $150 per barrel.
While members of the Organisation for Petroleum Exporting Countries (OPEC) seem to be excited about the bullish rally in oil price as it gives hope of higher fiscal revenue, which may help to partly bridge budget deficits, Nigeria, however, may be worse off as rising oil prices mean greater government subsidy payments.
Rising crude prices and a possible ban on buying Russian oil have intensified pressure by governments to find alternative supplies.
