Africa-Press – Namibia. SIPHELELE DLUDLA
GLOBAL oil prices have remained elevated at a seven-year high, driven by rising geopolitical tensions, which have stoked fears of supply disruptions and have seen investors looking for safe havens.
Brent crude prices rose above the US$88-a-barrel mark early on Monday, briefly dipping below US$87 (N$1 313) in the afternoon, as the world’s biggest oil producers were seemingly on the verge of going to war.
High oil prices could spell disaster, even for Namibian consumers, as it appears the price of petrol will soon move to N$15 per litre.
Russia’s looming invasion of Ukraine took another step on Monday, as the United States (US) ordered the departure of family members of staff at its Ukraine embassy, as well as the voluntary departure of employees.
The US is reportedly considering deploying several thousand troops to Nato allies in eastern Europe and the Baltics, and the European Union (EU) has threatened Russia with severe economic sanctions if Moscow takes military action against Ukraine.
A Russian military intervention in eastern Ukraine could lead to increasing difficulties in the supply of energy, as Russia is the world’s third-largest oil supplier after the US and Saudi Arabia.
Lombard Odier Bank chief investment officer Stéphane Monier says market uncertainty about possible additional sanctions, or conflict, was already visible as Brent crude oil had gained 10% to more than US$88 a barrel.
Monier says if there were a conflict, emerging markets would be the first to feel the impact, as oil prices would immediately rise, potentially benefiting net exporters and damaging the economies of net importers.
“This could also inflict a global supply shock, driving inflation from already high levels, and complicating central banks’ monetary policy decisions,” Monier says.
“Nevertheless, the conflict is more likely to play out economically than militarily, with Russia absorbing the threat of further limited financial sanctions in return for consolidating its existing 2014 position.”
The United Arab Emirates yesterday intercepted and destroyed two Houthi ballistic missiles targeting the Gulf country, with no casualties, following a deadly attack a week earlier.
Meanwhile, Opec+ continued to struggle to ramp up output.
The International Energy Agency last week said that Opec+ missed its production targets by 790 000 barrels a day in December as members such as west African producers Nigeria and Angola struggled to raise their production output.
For More News And Analysis About Namibia Follow Africa-Press
