Russia-Ukraine crisis: Brent crude tops $121 a barrel, wheat at 24-yr high

Oil prices skyrocketed on Wednesday, hitting multi-year highs, even as Opec+ nations agreed to stick to their plans for a modest output rise in April, ignoring the Ukraine crisis during their talks and snubbing calls from consumers for more crude. Gas, wheat, corn, and aluminium, too, became costlier as sanctions on Russia disrupted its commodities exports.

The Brent crude touched an intraday high of $121.89 a barrel, the highest since April 13, 2012, when it traded at $121.96. At 8.21 pm IST, it was trading at $111.5 a barrel — up 6.22 per cent. WTI crude oil was trading at 109.60 a barrel, up 5.99 per cent; earlier in the day, it was close to $111 a barrel. In India, MCX crude futures for March 21 delivery hit an all-time high of $8,274 a barrel.

The Western measures have deterred many buyers of Russian crude and even caused problems for exports from Kazakhstan, another member of Opec+. Russia accounts for about 10 per cent of global oil supplies.

The group comprising the Organization of the Petroleum Exporting Countries, Russia and allied producers has been hiking output by 400,000 barrels per day (bpd) each month since August as Opec+ unwinds cuts made when the pandemic slashed demand.

The group has resisted repeated calls from the United States and other major consumers for more supplies.

In a statement after Wedne­sday's meeting that announced the decision to roll over existing plans, the group made no mention of the Ukraine crisis, simply referring to "geopolitical developments" that were unsettling the market.

"Current oil market fundamentals and the consensus on its outlook pointed to a well-balanced market, and that current volatility is not caused by changes in market fundamentals but by current geopolitical developments," Opec+ said.

After Wednesday's talks, which lasted less than a quarter of an hour and the shortest meeting on record, one source said: "There was not even a word pronounced on the Ukraine issue."

Palladium prices around $2,610 an ounce were trading near the seven-month peak hit on Tuesday, aluminium hit a record high at $3,552 a tonne and nickel at $25,530 a tonne, close to the 11-year high hit last week.

On the bullion front, gold declined but remained near a 13-month high. It slipped after jumping almost 2 per cent in the previous session. At 8.37 pm IST, the yellow metal traded at $1,928.91 per ounce in the international market, down nearly 1 per cent. But in New Delhi, it rallied Rs 1,202 to Rs 51,889 per 10 gram, reflecting overnight gains in international precious metal prices along with rupee depreciation. Silver also jumped by Rs 2,148 to Rs 67,956 per kg.

Prices of wheat and corn also surged. Wheat prices hit $10.59 a bushel, the highest since March 2008. Corn prices rose to $7.47-3/4 a bushel, the highest since December 2012.

"Global buyers of grains have been increasingly turning to the US, Europe or South America to secure supplies in the immediate term, given the ongoing conflict," ING said in a note.

"Moreover, demand for stockpiling has also increased due to current uncertainty."