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| Russian President Vladimir Putin announced a military assault against Ukraine early Thursday morning in Russia. |
Crude oil hit $100 a barrel for the first time in over seven years on Thursday, as energy prices surged after Russian President Vladimir Putin announced a military assault against Ukraine.
Reports of explosions and flares across Ukraine came minutes after the speech broadcast early morning in Russia.
Brent crude futures breached $100 a barrel in Asia for the first time since 2014. The price was last up 5.67% at $99.38 at 3:27 a.m. ET. US benchmark West Texas Intermediate futures were also up 5.92% at $97.55 a barrel.
European natural gas futures roared higher, with Dutch and UK benchmark prices rising by 30% in the space of a day the most in almost two months while key German power prices rose 28%.
Russia is one of the largest exporters of oil and gas, and investors fear the crisis could disrupt energy supply, which in turn would add to already red-hot global consumer inflation. It supplies roughly 40% of the European Union's natural gas and any threat to that supply could drive regional prices even higher, analysts said.
"What we have said about oil is even more true of natural gas: any outage of Russian deliveries would be virtually impossible to offset, especially for Europe," strategists at Commerzbank said in a daily note. "Though European gas stocks should last until the end of the winter, the restocking needed for next winter would then be hardly possible," they added.
Russia competes with the United States and Saudi Arabia for the top spot in exports and was the world's third-largest oil exporter in 2020, so "thescale of disruptionandcorresponding difficulty in substituting for lost Russian supplymean thatprice sensitivity to Russian oil disruptions are high," said Vishnu Varathan, Mizuho Bank's head of economics and strategy in a note sent on Thursday before Putin's announcement.
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