Oil prices have risen sharply in recent weeks, owing to fears that the conflict in Ukraine may drastically decrease supplies. However, what happens in the oil markets never stays in the oil markets. The prices have witnessed a surge on Wednesday as investors became more pessimistic about the peace talks between Russia and Ukraine, fueling concerns about supply shortages, despite the fact that oil reserves in the United States have increased by more than 9 million barrels in the previous week. By 12:52 p.m., Brent crude had climbed by 2.6 percent to $107.36 per barrel, and WTI crude futures rose by 2.4 percent to $102.99 in the United States. The gains occurred after both benchmarks rose by more than 6% the day before.

Russian President Vladimir Putin said on Tuesday that Ukraine has disrupted peace negotiations and that Moscow will continue its "special military operation." While the US President, Joe Biden has accused Russia of genocide. According to a senior industry expert, "the Ukraine-Russia issue will not de-escalate any time soon." , adding further, "Oil prices have a limited downside."

On Tuesday, the International Energy Agency (IEA) cut its global demand forecasts, predicting that increased global supply will compensate for Russian oil output losses. According to the IEA, Russian output is expected to decline by 1.5 million bpd in April before increasing to 3 million bpd in May. Production in the United States is predicted to continue to rise, from 11.8 million bpd presently to around 12 million in 2022. As a result of strong international demand, refined product exports hit an all-time high, causing stockpiles in the United States to decline. The Organization of Petroleum Exporting Countries (OPEC) stated that replacing predicted supply losses from Russia is unrealistic and that it will not inject more crude.

The rising cost of oil has a considerable impact on the cost of other goods and services. The most evident is that Crude Oil is the source of energy for the significant number of vehicles that transport goods. So, increased Oil prices raise the cost of transportation and increase the cost of shipment. Approximately 71% of the 6.6 billion barrels of petroleum consumed by the United States in 2020 was utilized for various types of fuels, including gasoline, diesel, and jet fuel.