Oil and gas prices have surged by over 5 percent to hit 100 dollars per barrel following Russia’s decision to send forces into Ukraine.
The news that President Vladimir Putin was launching a military attack in Ukraine sent the international Brent Crude oil index to a high last experienced in 2014 on Wednesday night.
The Brent Crude oil index has reached over 100 dollars per barrel. Its futures are up 5.45 percent at 102.32 dollars per barrel.
The US crude futures on the other hand jumped by 5.23 percent to trade at 96.92 percent per barrel.
Natural gas prices have also increased by 5.39 percent with spot gold, which is typically considered a safe-haven asset, rising 1.82 percent and it last traded at 1,942.21 dollars.
Experts warn that the crude oil prices are likely to hit 120 dollars a barrel if the supplies become restricted. This could mean that petrol prices would significantly rise.
ALSO READ: Sugar Prices Up By 56%, Cooking Gas Spike By 167% As We Dance For Politicians
A close ally of Putin has warned that any retaliatory sanctions would see gas prices more than double in Europe. Analysts also predict that sanctions against Russia, which is responsible for about 10 percent of the world’s supply, could disrupt energy supply and send price shocks across the globe.
The knock-off effect on the global wholesale market will still drive-up prices, and in turn, lead to inflation or a serious effect on the prices of household items and necessities.
Experts further add that if Putin launches a full-scale war on Ukraine, oil prices will hit 140 dollars a barrel.
Kenyans, who are currently choked by the increased food prices, should prepare for soaring fuel prices and a further rise to the food bills amid the crisis in eastern Europe. The effect will spill off and hike transport prices, energy bills, and the cost of manufactured goods.
The crisis is also going to affect traders at the Nairobi Securities Exchange (NSE) by triggering sell-off of shares as investors opt for bonds and other risk-free or safe assets.
The NSE will significantly suffer, particularly since a majority of the traders – up to 58 percent – are foreign investors.