It was reported that the Brent crude oil prices had surpassed USD100 per barrel on Thursday, 24th February, the first time since 2014.
This was no coincidence since the price surge was felt almost immediately after Russian president Vladimir Putin ordered his troops into eastern Ukraine.
Moreover, it was also reported that the benchmark crude prices have now risen by more than 50 percent over the past year.
"We expect crude oil prices to remain volatile and rise from current levels if geopolitical concerns do not materially ease," a report from Kotak Institutional Equities on Wednesday, 23rd February read.
It added, "We maintain our current oil price estimate of USD80 per barrel in FY2023 for the time being, while noting upside risks if ongoing geopolitical concerns persist over the coming months."
The woes are added since global economies are still struggling to recover completely following the Covid-19 pandemic, and hiking oil prices can be detrimental to any progressive effort.
"If prices hold at current levels or rise further, cost pressures would further increase for a host of industries and household purchasing power would diminish, dampening the pace of the global recovery," Moody's Global Macro Outlook report published on Wednesday read.
However, Moody's projected a gradual decline of the oil prices in the second half of 2022 which will continue to slide further down in 2023.
Meanwhile, just over an hour after the Russian president had announced a "special military operation" in Ukraine, the West Texas Intermediate Crude price shot up by 4.19 percent to USD96 per barrel.
On the other hand, Brent Crude which measures international activity in Europe had reached USD101.25 which is a 4.5 percent increment.
Though not ideally related, the surge in oil prices does appear to affect stock futures since the S&P 500 index plummeted by 1.8 percent following the war declaration.
The situation has become somewhat critical since rising oil prices have affected gasoline prices in the United States as well.
While it is still too soon to make a calculated guess or wager in any official opinion, the island nation too can expect an announcement of oil price bumps in the coming days should the international geopolitical issues intensify further.
In the Maldives, the main entity responsible for importing and distributing oil is State Trading Organization (STO). The state-owned enterprise has on multiple occasions bumped prices on petrol and diesel whenever global oil prices surge.
The most recent revision to oil prices was made on 13th February 2022, under which diesel was sold at MVR13.04 per liter and petrol was sold at MVR12.98 per liter.
Currently, there is concern that the boiling circumstances in Russia and Ukraine will heavily impact crude oil prices in the coming weeks, which in turn will be reflected in the Maldivian oil market as well.
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