Global oil prices trade near $100 per barrel on supply disruption worries as tensions between Russia and Ukraine escalated.
The latest price is above the oil benchmark of $62/barrel in Nigeria’s 2022 budget.
The development is coming after Moscow ordered troops into two breakaway regions in eastern Ukraine.
Brent crude futures rose 3.82%, to $99.03 a barrel at 09:10 GMT+1 on Tuesday, the highest since August 1, 2014.
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U.S. West Texas Intermediate (WTI) crude futures jumped $4.79% to $95.86 a barrel versus Friday’s settlement.
On Monday, Russian President Vladimir Putin signed decrees recognising the independence of the Moscow-backed regions, fueling fears of supply shocks in the commodity markets.
The decrees signed by Putin conveyed Moscow’s official recognition over two breakaway territories in the Donbas region of eastern Ukraine — the Donetsk People’s Republic and Luhansk People’s Republic (DPR and LPR).
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The decrees recognised them as independent states and guaranteed their security with Russian troops. The decrees also said the Russian peacekeeping forces would be deployed in the regions.
Following the decrees, the White House said President Joe Biden would issue an executive order “that will prohibit new investment, trade, and financing by U.S. persons to, from, or in” the two Ukrainian regions under the control of Russian-backed separatists.
The rise in global crude oil prices should portend an upturn for Nigeria’s revenue — but payments for price shortfall may take up N2.6 trillion this year.
In December 2021, subsidy payment gulped N270 billion, amounting to N1.43 trillion in annual expense, shrinking revenue accrued to the federation account.
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