The closing price for Brent crude on Friday was $118.05 per barrel before spiking to $128.77. Photo: iStock
Ukraine’s invasion has had a major impact on South Africa, with experts fearing the spike in Brent crude oil prices could double the SA petrol price in the coming days.
At the time of publishing (6:40am South African Standard Time), the price per barrel dropped to $124.35 for WTI (West Texas Intermediate, the benchmark crude for North America) Crude and $128.56 for Brent crude.
Earlier this month, the oil price reached a seven-year-high when Brent crude breached $110 a barrel – an increase of 4.88%, while the WTI spiked by more than 5%.
The closing price for Brent crude on Friday was $118.05 per barrel, before spiking to $128.77 by 2:30 am SAST – an increase of 9.02%.
Meanwhile, the Brent North Sea crude oil stopped just shy of $140 when it reached $139.13 shortly after electronic trading opened around 1am SAST.
This places it at an all-time high in 14 years, when the European benchmark crude hit its highest recorded price of $147.50 per barrel in July 2008.
Traders on Sunday said the sharp increase was a result of the fallout from the invasion of Ukraine. The fuel price had spiked 33% since 24 February, when Russia declared war.
On Sunday, Ukrainian Foreign Minister Dmytro Kuleba urged Shell and other energy giants to cut off Moscow’s biggest revenue source and “stop buying Russian oil.”
“Russian oil and gas smell of Ukrainian blood,” he said.
André Thomashausen, an emeritus professor of international law at Unisa, said a worst-case scenario for South Africa would be a fuel price of R40 per litre.
If this happens, it could severely hinder South Africa’s post-Covid-19 economic recovery and have a “devastating effect on all the parameters of the current budget”.
Several of South Africa’s largest sectors would be affected – from farming and agriculture to a spike in transport and food prices.
NOW READ: Brent crude oil above $110 per barrel and climbing (2 March 2022)
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