Subsidy May Hit N5trn As Oil Hits $140

Oil price yesterday hit S140 per barrel as the Russia-Ukraine war continues.

The spike followed the announcement early yesterday by the United States’ President, Joe Biden, of a ban on Russian energy imports, including oil, coal, and LNG, which has added to the pressure in oil markets. Russia is the second largest producer of crude oil in the world.

The price brings the commodity to the highest ever experienced in the last 14 years. Experts have, however, warned that if urgent steps were not taken, oil may hit the $200 per barrel mark by month end.

According to ICE Futures Europe data compiled by Bloomberg, more than 1,200 contracts were traded on last Monday for the option to buy Brent Crude future for May at $200 per barrel. As a result of active options trading in recent days, the price to buy such options has skyrocketed. For example, the $200 oil options on the May Brent futures – expiring on March 28, three days before the contract expires-saw the price for buying them surge by 152 percent to $2.39 a barrel.

The price of the $150 a barrel June call option doubled, and the $180 call options surged by 110 percent, per the exchange data cited by Bloomberg.

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