The oil market has encountered severe changes in various aspects including price volatility and alternating trade flows since the end of February 2022, as Russia’s sudden invasion of Ukraine has caused more serious consequences than initially expected. The western nations’ initial estimation of the crisis was that it would only involve seizure of Ukraine’s eastern regions, Donetsk and Luhansk.
The US, European Union and allies have responded to Russia’s aggressiveness by imposing economic sanctions involving trade, individuals, financial intuitions, and the SWIFT payments system (Society for Worldwide Interbank Financial Telecommunication). However, the sanctions do not so far extend to petroleum exports other than to the US and the UK.
