Oil prices are at a seven-year high over worries of a Russia-Ukraine war

Crude oil neared $100 a barrel on Tuesday (Feb. 22) over fears that the Russian invasion of Ukraine was imminent, or had perhaps even already begun. The price of a barrel of Brent crude briefly touched $99.38, the highest since September 2014, before hovering around $98 for the remainder of the morning, even as the West finalized sanctions on Russia.

Confirmed news of an invasion will likely send prices over $100 a barrel. As economic activity has picked up after the easing of pandemic lockdowns, the demand for oil has already been high, leading to a steady climb in prices. The Organization of Petroleum Exporting Countries (OPEC) has resisted demands thus far to increase production, arguing that if Iran is able to work out a nuclear deal with the West, Iranian oil will ease the crunch.

But sanctions on Russia will constrict supply once more. Western oil majors like BP, Exxon, and Shell work extensively in Russia; BP is a major shareholder in Rosneft, Russia’s largest oil producer, Shell owns part of an offshore gas field controlled by Gazprom, and Exxon partners with Russian companies to extract oil and gas in Russia. If these companies don’t get exemptions from sanctions, as major American corporations have been pushing for, their inability to place oil and gas into the world markets will drive prices up higher still.