Following the Russia invasion of Ukraine and the subsequent sanctions of the United States on Russia’s oil and gas exports, a top strategist has warned that crude oil prices may rocket to $200 a barrel by summer of this year.
Ever since Russia started the war in Ukraine two weeks ago, oil prices have spiked to close to $130 a barrel, an increase of about 31%, after US and its allies slammed sanctions on Russia.
On Wednesday, Brent crude oil prices traded around $127 a barrel as traders digested the Biden administration’s ban of imports of Russian oil, liquefied natural gas and coal in response to the country’s war on Ukraine.
This spiraling price of crude already has begun to affect the prices consumers pay at the pump.
The national average price of gasoline has surpassed $4 a gallon in the U.S. for the first time since 2008, according to data from GasBuddy. Prices at the pump have spiked 41 cents in the last seven days alone.
Gas prices in California are the highest in the country at an average of $5.28.
Material gas price inflation has some on Wall Street concerned about a potential sharp slowdown in U.S. economic growth.
Also in Nigeria, the attack on Ukraine by Russia had led to an increase in the prices of crude oil and all its derivatives, including diesel and aviation fuel, just as in the rest of the world. Currently, the problem is such that even when you have the money the product cannot be purchased. This has grounded economic activities in most part of the country.
For Nigeria, though a producer of crude oil but dependent on the importation of refined oil, marketers of this product are facing multiple headwinds sourcing and importing them into the country. Even accessing foreign exchange for the purpose of importing this refined product has been very challenging.
Analysts believe that consumers are not only facing difficulties in higher prices, particularly at the pump but also in food and other items, which according to them might tamp down consumer demand this year. This, many believe might weaken economic growth.