Oil prices saw a notable rise of nearly 1% on Friday, reaching their highest levels in two weeks, driven by escalating conflict in Ukraine. This increase is a natural consequence of what is known as “geopolitical risk,” amplified by global crises and international conflicts.
Brent crude prices reached $75.17 per barrel, up by 94 cents or 1.3%. Meanwhile, West Texas Intermediate (WTI) crude ended trading at $71.24 per barrel, marking a gain of $1.14 or 1.6%.
Experts believe the recent escalation between Russia and Ukraine represents a significant shift in global tensions, particularly amid growing concerns over the conflict’s potential expansion.
In an effort to increase pressure on Russia, the United States imposed new sanctions on Russia’s Gazprombank. These measures are part of a series of economic sanctions that President Joe Biden aims to implement before leaving office in January. In response, Moscow labeled the sanctions an attempt to hinder Russian gas exports but affirmed the existence of alternative plans to address these challenges.
On another front, China, the world’s largest oil importer, announced a package of measures to support trade, including boosting energy product imports. This step comes amid concerns over tariff policies hinted at by President-elect Donald Trump. Estimates suggest a rebound in China’s crude oil imports during November, driven by increased domestic demand.
Despite the rise in oil prices, European markets faced significant pressure following reports indicating an unexpected downturn in business activity in the Eurozone. The services sector, the largest in the European economy, experienced a notable contraction, while the manufacturing sector sank deeper into recession.
In contrast, economic activity in the United States showed strong performance, according to an “S&P Global” report. The Composite Output Index rose to its highest level since April 2022, supported by robust growth in the services sector.
The U.S. dollar also recorded a significant increase, reaching its highest level in two years against a basket of major currencies. This rise adds pressure on global oil prices, as it makes crude more expensive for buyers using other currencies, potentially reducing demand.
