The price of Brent crude oil has skyrocketed to over $100 a barrel following the escalation of the conflict between Russia and Ukraine on Thursday. With Russia announcing a military operation in Ukraine in a bid to demilitarize the country, oil prices have reached $100.04 a barrel for the first time in over seven years.

With Russia representing the largest gas exporter and second largest oil exporter globally – Europe relies on Russian gas for one-third of its supply and one-quarter of its oil – the geopolitical conflict, coupled with North Atlantic Treaty Organization member countries’ sanctions on the east-European nation has disrupted global supply networks. Now, as tensions escalate, the already volatile price market has exploded.

Warren Patterson, Head of Commodities Strategy at ING Groep, explained that “A further escalation has pushed prices to the $100-a-barrel mark. The oil market will now wait to see how Western nations respond to Russia’s latest actions. As a result, we will likely see even further volatility in the market, as well as the need to price in a larger risk premium.”

The global oil and gas market was already tight largely due to accelerating demand levels and insufficient supply. While the Organization of Petroleum Exporting Countries (OPEC) and its allies focus on meeting production quotas, and non-OPEC producing countries ramp up production, uncertainty regarding Russian exports has only exacerbated market volatility.