For the first time since 2014, the global oil benchmark surpassed $90.

• On Wednesday, the price of Brent crude futures, which serves as the global oil benchmark, surpassed $90 for the first time in over seven years.
• Amid rising geopolitical tensions between Russia and Ukraine, and with supply remaining tight despite a surge in demand, the threshold breakthrough occurs.
• Rebecca Babin of CIBC Private Wealth stated that if Russia were to be sanctioned due to an invasion of Ukraine, it would likely result in an increase in crude oil prices.

Since 2014, the international oil benchmark topped $90 on Wednesday, marking a significant milestone in oil's ongoing recovery from its pandemic-era lows in April 2020.

Amid rising geopolitical tensions between Russia and Ukraine, and with supply remaining tight despite a surge in demand, the threshold breakthrough occurs.

Although the contract reached a high of $90.47 per barrel, Brent slightly pulled back in afternoon trading and settled 2% higher at $89.96 per barrel.

The U.S. oil benchmark, WTI, closed 2.04% higher at $87.35 per barrel. During the session, the contract reached a high of $87.95, a price not seen since October 2014.

Rebecca Babin of CIBC Private Wealth stated that if Russia were to be sanctioned due to an invasion of Ukraine, it would likely result in an increase in crude oil prices.

Without a de-escalation, the bid for crude could increase daily, she stated.

Goldman Sachs stated on Wednesday that their base case assumes supply disruptions are unlikely to happen, but there is potential for energy prices to increase due to the current tight market.

Historically low outages in commodity markets have ended, leaving them more vulnerable to disruptions, according to a note to clients by the firm.

With inventory levels at their lowest in decades, limited spare capacity, and a less flexible shale sector, large energy price movements are more likely to move upwards, strengthening the argument for adding commodities to investment portfolios.

This month, Goldman Sachs predicted that Brent oil can reach $100 per barrel by the third quarter, joining other Wall Street firms in forecasting a triple-digit price.

While geopolitical factors may be contributing to rising prices, the underlying economic conditions are driving the upward trend.

Despite OPEC and its allies increasing crude production, the group has not met its targets. At the same time, U.S. shale oil growth has slowed, and omicron has not resulted in the demand hit that was initially anticipated. Furthermore, inventory levels remain low.

According to the Energy Information Administration, crude oil inventories increased by 2.4 million barrels during the week ended January 21, exceeding the Street's expectations of a 150,000-barrel increase, as estimated by FactSet.

"How long will we have to wait for triple figures?" Craig Erlam of Oanda questioned immediately. Although it is unlikely that oil and gas will be used as a weapon, if it were to happen, it could result in a significant increase in prices due to the tightness of the markets.