Oil jumps amid escalating tensions between Russia and Ukraine

Oil prices jumped in afternoon trading Friday amid escalating tensions between Ukraine and Russia.

With about 2 hours left to the trading day, U.S. National Security Advisor Jake Sullivan said at a White House briefing that there were signs of Russia escalation at the Ukraine border and that it was possible that an invasion could take place during the Olympics, despite speculation to the contrary.

“We continue to see signs of Russian escalation, including new forces arriving at the Ukrainian border. As we’ve said before, we are in the window when an invasion could begin at any time,” Sullivan said Friday.

The U.K. advised British nationals to leave Ukraine immediately. A Downing Street spokesperson said Prime Minister Boris Johnson feared for the “security of Europe in the current circumstances.”

The spokesperson added that Russian President Vladimir Putin “had to understand that there would be severe penalties that would be extremely damaging to Russia’s economy, and that Allies needed to continue with efforts to reinforce and support the Eastern frontiers of NATO.”

U.S. West Texas Intermediate crude futures, the U.S. oil benchmark, rose 4.7% to trade at $94.21 per barrel. It’s the contract’s highest price since 2014.

International benchmark Brent crude also rose to its highest level in more than seven years, jumping 4% to trade at $95.18 per barrel.

“The market has been concerned about this outcome for several weeks but most believed it would not occur or would at least be after the Olympics,” noted CIBC Private Wealth’s Rebecca Babin. “The key consideration for crude will be what kind of sanctions the US and allies move forward” should Russia invade, she said.

“That is what will ultimately determine how crude supply is impacted,” she added.

Oil prices had already been up more than 2% earlier in the session following the International Energy Agency’s latest oil report.

The firm now expects global demand to hit a record 100.6 million barrels per day this year “as restrictions to contain the spread of Covid ease.”