Oil Could Hit $140 a Barrel in Protracted Russian War

That's how high the price of a barrel of oil could go if Russia’s oil exports are choked off because of its invasion of Ukraine, according to one estimate.

Brent crude, the global benchmark for oil prices, climbed above $100 per barrel on Thursday, reaching a fresh eight-year high, after Russia sent its military forces into neighboring Ukraine. Because Russia is one of the world’s top oil producers, any disruption of much-needed Russian oil in a market already struggling to keep up with high demand will increase prices.

Just how much they’ll go up depends on whether the Ukraine situation spirals into a wider clash between Russia and the West, experts say. In a worst-case scenario, oil could climb to the $140 mark, the highest price since 2008, according to Caroline Bain, chief commodities economist for Capital Economics. That’s more than double the $60 per barrel that Bain thinks oil should cost if prices were based strictly on supply and demand fundamentals, not geopolitical risk.

“In past incidences of conflict (e.g. Iraq's invasion of Kuwait) oil prices more than doubled,” she said in an email. 

Whatever happens in Ukraine, Capital Economics expects prices to remain at least $100 per barrel for the next few months. That means consumers will feel the effects of the spike initially at the gas pump, since oil accounts for about half the price of a gallon of gasoline.

The national average for a gallon of regular unleaded could reach $4 by April or May, according to Patrick De Haan, head of petroleum analysis at GasBuddy. 

Some consumers could even see pump prices rise between 5 cents and 10 cents as early as Thursday night, De Haan said, though it’s more likely that the increases will phase in across the country over the next week or two. On Thursday, the national average was $3.54 per gallon, according to AAA.

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