Oil prices rise due to pressure of Russia-Ukraine conflict
Brent crude futures rose $1.96, or 1.8%, to $109.89 a barrel
WTI crude futures in the US climbed $2.09, or 2%, to $106.79
OPEC+ missed its production target by more than 1 million barrels per day (BPD) in February
Oil prices rose $2 on Monday as Ukrainian soldiers defended themselves against strong Russian bombardment, while major oil companies revealed that they are failing to meet their quotas under a supply deal.
Brent crude futures rose $1.96, or 1.8%, to $109.89 a barrel, following a 1.2% rise the previous session. West Texas Intermediate (WTI) crude futures in the United States climbed $2.09, or 2%, to $106.79, extending a 1.7% gain last Friday.
Prices rose after Ukraine's deputy prime minister, Iryna Vershchuk, stated early Monday that the country's forces in the besieged eastern port city of Mariupol had no chance of surrendering.
With no signs of the war abating, the question of whether the market will be able to replace Russian barrels affected by sanctions resurfaced.
According to the most recent report from the Organization of the Petroleum Exporting Countries and its partners, including Russia, known as OPEC+, certain suppliers are still falling short of their agreed-upon supply quotas.
OPEC+ missed its production target by more than 1 million barrels per day (BPD) in February, despite their agreement to increase output by 400,000 BPD per month as they reverse significant cutbacks made in 2020, reported Reuters.
Saudi Arabia and the United Arab Emirates, the two OPEC members with the potential to immediately increase supply, have so far rejected pleas from big consuming nations to increase output quicker in order to help bring down oil prices.
Because of the dismal supply outlook and high prices, the International Energy Agency issued a report on Friday outlining strategies to reduce oil consumption by 2.7 million BPD in four months, including carpooling, reduced speed limits, and cheaper public transportation.
This would assist to compensate for the 3 million BPD of Russian oil and products that the IEA estimates would be removed from the market by April.