Highest oil prices in a decade, electricity and gas prices also rising

(Patria) - Oil prices this morning are $129 per barrel. If this price holds, the price of derivatives at the pumps will rise to 3.20 KM per liter.

On world markets, oil prices jumped by more than 20 percent last week, to the highest prices in the last 10 years, as supplies from Russia could fall due to the war in Ukraine and Western sanctions against Russia, while demand remains strong.

The price of a barrel on the London market jumped to $118.11 last week, the highest level since February 2013.

On the American market, however, a barrel rose by 26 percent, to $115.68, the highest since 2008. In that year, a barrel cost $147.

The biggest price jump since mid-2020 followed after the US and its allies imposed sanctions on Russia, which, although not aimed at the sale of Russian oil and gas, have still squeezed its industry and threaten to reduce supply in the coming months.

In addition, traders fear that sanctions could be extended to Russian oil exports, so they refuse to sell Russian oil. There is also fear among transporters of penalties for potential sanctions violations, so they refuse to transport Russian oil.

"We expect Russian oil exports to decrease by one million barrels per day due to the indirect impact of sanctions and voluntary actions by companies. Oil prices are likely to continue to rise, perhaps above $130 per barrel," said Jarand Rystad, CEO of Rystad Energy.

Russia exports between 4 and 5 million barrels of oil per day, about half of which goes to Europe, making it the world's largest oil exporter after Saudi Arabia. Therefore, traders fear that supply disruptions from Russia will further widen the gap between weak supply and growing demand.

"Due to Russia's invasion of Ukraine, the fear of supply disruptions will remain at the forefront," says Stephen Brennock of PVM brokerage.

The problem of scarce supply has only been partially alleviated by the coordinated release of 60 million barrels of oil from the strategic reserves of the International Energy Agency (IEA) member countries.

Almir Bečarević, an expert in the field of gas, said this morning that the price of electricity is 500 euros per MWh. The price of gas today could exceed $2,300 per 1000 Sm3, which will be a historical maximum.