The Ukraine situation has roiled markets, causing oil to have its wildest week on record.

The Ukraine situation has roiled markets, causing oil to have its wildest week on record.

Oil prices continued their upward trend after a week in which they had swung within a $20 range following Russia’s invasion of Ukraine, which roiled global markets and fueled fears of a supply bottleneck.

Futures in New York jumped as much as 5.7 percent on Friday, putting them on track for a weekly rise of more than 20%. Brent has traded in the widest range since the contract’s inception in 1988, surpassing the enormous swings experienced during the 2008 global financial crisis and the coronavirus outbreak. The rally was only briefly halted Thursday as diplomats indicated that negotiations with Iran were reaching a conclusion that may pave the door for easing oil sanctions.

“There has been nothing to take the edge out of this market, and we’ve had single direction volatility, meaning prices higher,” said Rob Haworth, senior investment strategist at U.S. Bank Wealth Management. To lower prices, the market would need to see either OPEC or U.S. drilling activity change meaningfully, he said.

After Ukrainian officials said Russian forces attacked a nuclear plant — Europe’s biggest, Prices climbed Friday. While the likelihood of a significant disruption to Russian supply has boosted prices this week, signs that an Iranian nuclear deal may be near have added to price volatility.

The International Energy Agency warned that global energy security was in jeopardy. The planned release of emergency oil reserves by the United States and other major nations had failed to alleviate supply concerns. According to JPMorgan Chase & Co., global benchmark Brent crude could conclude the year at $185 per barrel if Russian supply remains interrupted, and some hedge funds target $200.

The invasion has sent shockwaves through the energy industry. Oil majors such as BP Plc, Shell Plc, and Exxon Mobil Corp. are leaving Russia, consumers of its crude are looking for alternatives, and shipping prices are rising. The Russian oil company Lukoil PJSC has advocated for a “quick conclusion of the military confrontation.”

  • At 11:29 a.m. in New York, West Texas, Intermediate for April delivery was up $4.37 to $112.04 per barrel.
  • Brent crude for May delivery increased $4.11 to $114.62 per barrel.

On Saturday, the chief of the world’s nuclear watchdog said that his visit to Tehran might “pave the way” for restarting the Iran nuclear deal, which would see the return of formal oil exports. OPEC’s producer has millions of barrels of oil stashed offshore that might be released swiftly in a tight market.

Brent is still in deep backwardation, a bullish structure in which immediate barrels are more costly than later-dated cargoes, indicating a tight supply-demand balance. After reaching record levels in recent days, the benchmark’s immediate spread was $3.97 per barrel.

Against this context, OPEC+ maintained its planned gradual rise in production in April during its monthly meeting on Wednesday, closing up in record time without discussing the invasion of Ukraine. Along with Saudi Arabia, Russia is a significant leader in the cartel. According to IEA Executive Director Fatih Birol, the outcome of the meeting was “disappointing.”

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