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The price of Brent crude oil hit $70/barrel this week – the first time in three years that prices have been at this level.
Markets are bullish on oil prices due to tightening global oil stocks and geopolitical risk in some major producer countries.
Since October, Brent oil prices have rallied 25% to current levels and the strong start to 2018 looks set to continue.
OPEC, the cartel of global oil producers, announced an extension of its supply cut deal in December to continue through to 2018.
Russia
Russia, another major oil producer that’s outside the OPEC cartel, has also curbed production in recent years in order to lift prices.
The increase in oil prices is a boost to the economies and the spending power of oil producing countries, which are critically important to global dairy markets.
Oil producing countries account for almost a third (30%) of all dairy imports in the world.
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