ARKANSAS, January 23 (Future Headlines)- Oil prices experienced a 2% surge, driven by escalating concerns over global energy supplies in the wake of a Ukrainian drone strike targeting Russia’s Novatek fuel terminal. The incident added to existing geopolitical tensions and supply chain disruptions. Simultaneously, extreme cold weather conditions persisted in the United States, further impeding crude oil production.

The Brent March crude futures settled at $80.06 per barrel, reflecting a notable increase of $1.50 or 1.9%. Similarly, the front-month U.S. West Texas Intermediate (WTI) crude futures contract for February delivery closed at $75.19, marking a gain of $1.78 or 2.4%, as the contract reached its expiration. The more active March WTI contract also experienced an uptick, closing at $74.61 after a $1.36 increase.

The key driver behind the surge was the Ukrainian drone strike targeting Novatek’s fuel terminal, intensifying concerns about the stability of global energy supplies. Novatek is a major player in the Russian energy sector, and any disruptions in its operations can have cascading effects on the broader energy market.

Additionally, extreme cold weather conditions in the United States contributed to the upward pressure on oil prices. The adverse weather has been hampering crude oil production, adding to the challenges already faced by the energy sector. Cold weather disruptions can lead to logistical challenges, impacting the extraction, transportation, and refining processes.

The Brent crude benchmark, a crucial indicator of global oil prices, reaching $80.06 per barrel signals a significant milestone. This level reflects the highest point in oil prices in recent times and underscores the volatility and sensitivity of the market to geopolitical events and weather-related disruptions.

Investors and market participants closely monitor such developments as they have a direct impact on oil prices, which, in turn, influence various sectors of the global economy. The interplay between geopolitical tensions, supply chain disruptions, and weather-related challenges underscores the complexity and vulnerability of the energy market.

As the situation unfolds, market analysts will continue to assess the potential implications on global energy markets, supply chains, and the broader economic landscape. The dynamic nature of the energy sector requires a nuanced understanding of geopolitical events and external factors that shape oil prices, ensuring that stakeholders can make informed decisions in response to evolving market conditions.

Reporting by Moe Khaled; Editing by Sarah White