Oil prices are soaring after media outlets began to report that a Russian invasion of Ukraine is imminent.
PBS has reported that according to officials, “the U.S. believes Putin has decided to invade Ukraine and communicated those plans to the Russian military.”
Six U.S. and Western officials have reportedly told PBS that they expect a Russian invasion to begin next week, with defense officials expecting a “horrific, bloody campaign that begins with two days of bombardment and electronic warfare, followed by an invasion, with the possible goal of regime change.”
The reports, hurridly carried out over the Twittersphere, sent oil prices skyrocketing, and stocks tumbling.
At 2:20 p.m. EST, WTI crude was trading at $94.42—a $4.54 (+5.05%) increase on the day. Brent crude was trading up $3.90 (+4.27%) on the day at that time.
WTI is trading at its highest level since 2014, and is up $10 in the last 30 days.
JPMorgan said earlier this week that Brent could “easily” reach $120 per barrel if Russia invaded Ukraine and the U.S. and other nations sanctioned Russia’s oil and natural gas exports.
If Russia did invade Ukraine, the Biden Administration would have to choose between sanctioning Russia’s oil exports and keeping retail gasoline prices at American pumps from reaching the stratosphere.
Gasoline prices are already higher than the Administration would like, particularly as Biden’s disapproval rating approaches 60%.
Sanctions on Russia would be devastating for both the Biden Administration and the American consumer—but it would also cause great hardship to Russia, which relies a great deal on crude oil revenue for its budget. Last year, the value of Russia’s crude oil exports totaled more than $300 million per day.
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By Julianne Geiger for Oilprice.com
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