Fears for petrol and heating bills as oil prices soar in the wake of Russian invasion

24 February 2022, 07:59

Oil prices soar in the wake of Russian invasion
Oil prices soar in the wake of Russian invasion. Picture: Alamy

By StephenRigley

Britons face fresh cost hikes as oil prices soared to levels not seen in eight years in the wake of the Russian invasion of Ukraine.

As one of Europe's worst security crises in decades developed, the price of Brent crude oil had jumped by 5.6% by a little after 7am UK time to $102.30 dollars per barrel, hitting its highest point since 2014.

Russia is the world's second-largest oil producer, which mainly sells crude to European refineries, and is the largest supplier of natural gas to Europe, providing about 35% of its supply.

Global stocks slumped on the Asian markets on Thursday. The dollar, gold and oil prices jumped, and U.S. Treasury yields fell as the world braced for Russia's full-scale invasion of Ukraine.

Around the same time the rouble fell, the US dollar gained more than 10% against the Russian currency at one point.

Early in the morning the Moscow Stock Exchange said it had "suspended trading on all of its markets until further notice". But it later restarted at 10am local time, 7am in the UK.

Overnight, U.S. stocks took a beating, with the Dow Jones Industrial Average down 1.38% to barely above the level that would have confirmed a correction.

The MSCI World Index , a leading gauge of equity markets globally, skidded to its lowest level since April 2021.

MSCI's broadest index of Asia-Pacific shares outside Japan fell 1.6% in morning trade, with Australian shares at one point diving nearly 3%. In Tokyo, the Nikkei was 1.1% lower. Chinese blue chips fell 0.6%.

Ray Attrill, head of FX strategy at National Australia Bank, said: "'The markets figure Russia will now do what ever it wants given how weak the sanctions were, and are pricing in an invasion.

"The real worry is that Europe is cut off from Russian gas. The EU couldn't cope with such a supply shock and would have to rein in demand, which would be economically debilitating.

"Higher energy prices are also where the rubber hits the road as far as global economic growth is concerned, that's got to be bad for risk sentiment."

The AA estimates that motorists are now paying £14.72 extra for their fuel.This is because those with a typical 55-litre tank will now be paying £81.73 - up from £67.01 last year.

The crisis isn't only driving up fuel costs - Brits could see their energy bills surge too. Fears have been raised that shortages could happen if tensions develop which could drive up prices.

Wholesale gas prices opened at 285p per therm - a 33% increase over night and a 65% increase since close on Monday.

The UK's stock market was also shook after Russian missiles blasted Ukraine earlier this morning. The London Stock Exchange’s leading FTSE 100 index plunged more than 200 points, or 2.7%, within moments of opening this morning in reaction to the invasion.