After President Vladimir Putin suggested that Russia is prepared to use nuclear warfare to cling to its territories in Ukraine, oil prices spiked on Wednesday.
n a televised speech, Putin also said that Russia is partially mobilising 300,000 reserve members with combat experience to add to its soldiers in Ukraine.
"We will employ every available tool to defend Russia and our people in the event that our nation's territorial integrity is endangered. Nothing here is a bluff, "According to a BBC translation of Putin's speech to the nation,
The benchmark, Brent oil futures, up 2.57% to $92.95 per barrel as of 5:30 a.m. ET. The US benchmark WTI crude price increased 2.08% to $86.21 per barrel.
The conflict between Russia and Ukraine has disrupted international oil markets as Western allies placed sanctions and export prohibitions on Moscow. Early in March, shortly after Russia started its invasion, the price of Brent crude soared beyond $120 per barrel.
Market constraints have contributed to an energy crisis in Europe, leading nations like Germany and France to look for alternate fuel supplies before the winter months. There are worries that an extended conflict may increase strain on oil and natural gas supply.
Crude oil prices are also being affected by concerns about how a slowdown in China's economy may affect demand. Beijing has implemented a number of limitations and lockdowns to stop the COVID-19 virus from spreading, which has hurt enterprises.
As demand outstrips supply, oil might rise above $150 per barrel, according to JP Morgan. This is partially due to businesses underinvesting in future production, which increases the likelihood that there will soon be a significant supply shortage.
Investors are preparing for the Federal Reserve to end its two-day meeting with yet another disproportionate interest rate increase of 75 basis points.