Crude oil rose back above $100 a barrel on Friday as Russian troops closed in on the Ukrainian capital Kyiv following a day of market volatility prompted by Moscow’s invasion of its neighbor.
Brent crude gained 2.1 percent to $101.18 a barrel at 11.43 a.m. Riyadh time after nearing $106 on Thursday before falling back to $99 as US sanctions spared Russian energy exports. US benchmark WTI added 1.7 percent to $94.34 a barrel.
European natural gas prices eased about 19 percent to EUR109 ($121.90) per megawatt hour after reaching EUR142 on Thursday.
Wheat prices on the Chicago Board of Trade rose as much as 2.8 percent to $9.61 a bushel, the highest price since 2008 before trading 0.2 percent higher. Ukraine and Russia account for about one third of global wheat exports.
Retaliatory sanctions from around the world have yet to target Russian energy exports, reflecting its importance as a provider of crude oil and natural gas. Europe relies on Russia for 40 percent of its annual natural gas supplies.
Russia supplied about 2.66 million barrels per day of crude via the seaborne market to Europe in February, according to Refinitiv Oil Research data, and it regularly ships more than 2 million bpd in a typical month.
Japan will strengthen sanctions against Russia to include financial institutions and military equipment exports, Prime Minister Fumio Kishida said on Friday, adding that an impact on his resource-poor nation’s energy supply is unlikely.
Japan has about 240 days’ worth of crude oil reserves and reserves of liquefied natural gas (LNG) to last two to three weeks, Kishida said, adding that the government would step up measures to stem a rise in retail fuel prices. “The economic sanctions against Russia will not directly obstruct energy supply,” Kishida said.
However, Russia’s ambassador to Japan, Mikhail Galuzin, said he had recently notified a top Japanese official that there would be a response to Japan’s actions, terming them a “mutually unbeneficial step.”
Russia’s invasion of Ukraine is likely to disrupt global commodities markets even without direct sanctions on the sector from Western powers, as the risk of doing business with Russia becomes too much for many private companies.
Reports that a coal bulk vessel chartered by commodity trading house Cargill was struck by a shell in the Black Sea in Ukrainian waters on Thursday gives an indication of the risks they face.