New Delhi: The confrontation between Russia and Ukraine could lead to a sharp jump in the price of crude oil and liquefied gas (LNG) globally. This will have a negative impact on energy importing countries. Moody’s Investors Service, a company related to the credit rating and research, said this on Wednesday.
Michael Taylor, managing director of Moody’s Investor Service, said a change in import conditions could have an impact on trade. However, commodity-producing countries in Central Asia may have the option of increasing supplies to China. Supply chain constraints will increase and this will add to inflationary pressures in the sector.
Tension continues between the two countries
Tensions between Ukraine and Russia have increased in recent days. Russia on Monday recognized the independence of separatist-dominated areas of eastern Ukraine and deployed Russian forces there.
“In the event of a conflict between the two countries, there could be a sharp jump in global oil and liquefied natural gas (LNG) prices globally,” Taylor said. This will be positive for some exporters in the Asia-Pacific region. Whereas on a large number of purely energy importers, its impact will be negative.
Brent crude near $100 per barrel
“However, it is a matter of relief that many Asian economies have long-term supply contracts for LNG. This will reduce the impact of volatility in spot prices.
It is noteworthy that global crude oil standard Brent crude on Tuesday reached close to $ 100 a barrel due to fears of an attack on Ukraine and Western sanctions on Russia. Russia is the largest exporter of natural gas and the second-largest exporter of oil. India imports 85 percent of its total crude oil requirements and half of its natural gas requirements.
