Weekly Energy Market Report - Markets Respond as Russian Invasion Escalates

As Russian forces advance further into Ukraine, energy markets have faced some of the biggest disruptions in recent memory - with prices skyrocketing as the crisis continues.

The cost of oil went through the roof on Wednesday, as traders scrambled to buy up non-Russian oil. Brent exceeded $113 a barrel, it’s highest level since 2014.

Gas prices too have risen steeply, at one point surging on Wednesday to near-record highs of more than 460p a therm.

Russia's shelling of Europe’s biggest nuclear power plant, Zaporizhzhia, caused stock markets across Europe to tumble. Economists are warning that the UK's inflation rate could now hit 10% because of higher costs, and that UK household energy bills could reach as high as £3,000 a year.

On Thursday the International Energy Agency urged households to turn down their thermostats to stop the Kremlin using Russian gas as an “economic and political weapon” in an unprecedented intervention.

The European Commission is to adopt a new strategy next week to ensure more imports from the US, Qatar, Norway, Egypt, Algeria and Azerbaijan. It is part of a longer term plan to boost energy security, cushion the impact of soaring gas prices and accelerate the build-up of renewables and energy efficiency.

Until then, our reliance on Russian oil and gas continues to leave our domestic markets at the mercy of Putin and his war at the very heart of Europe. With no end to the invasion in sight, the future remains uncertain.