The ongoing Ukraine conflict has introduced a new layer of complexity to the global energy market, exacerbating existing risks and uncertainties. As tensions between Russia and Ukraine continue to rise, oil prices have been pushed even higher, with Brent crude trading above $100 per barrel.
The situation is further complicated by the recent drone strikes launched by Ukraine against Russian ports and refineries, which has resulted in a significant reduction of Russia's oil export capacity. According to estimates, roughly 40% of Russia's oil export capacity is currently offline, posing a major challenge for global energy markets.
This development is particularly concerning for risk assets, including bitcoin, as higher oil prices can lead to increased inflation and interest rates. In response to these developments, traders are already preparing for a potential Fed rate hike in the short term, with some wagering on a rate increase within two weeks.