Oil prices jumped to another high on Tuesday as the crisis between Russia and Ukraine deepened. Russian President Vladimir Putin, on Monday, ordered the deployment of Russian forces into the two breakaway regions of eastern Ukraine and announced that Russia would recognize both Donetsk and Luhansk as independent states.
Brent crude futures jumped by 3.96 percent to $99.15 per barrel, the highest since September 2014. West Texas Intermediate crude futures also rose by 4.86 percent to reach $95.50 per barrel.
Consequently, on Monday, Saudi Aramco stated that it sees demand rising in the coming months, especially in Asia. The Chief Executive Officer of Vitol Group, the world’s largest independent oil-trading house, in an interview with Bloomberg, said that he expects oil prices to surpass $100 per barrel for a sustained period, with the world setting fresh demand records this year. The Vitol CEO said he expects demand to surge in the second half of the year if global travel continues to return to normal.
Impact on Pakistan
The drastic increase in international oil prices poses another serious challenge for the government. Last week, the government had increased the prices of all petroleum products by up to Rs. 12 per liter for the next fortnight.
Last weeks’ increase took the prices of petroleum products to a record high, with the price of petrol in Pakistan surging to Rs. 159.86 per liter and the price of high-speed diesel (HSD) rising to Rs. 154.15 per liter.