Oil prices jumped on Wednesday after Russian President Vladimir Putin hinted that Russia is ready to use nuclear force to hold onto its territory in Ukraine.

In a televised address, Putin also said that Moscow is calling up more troops to join their forces in Ukraine, via a partial mobilization of 300,000 reservists with military experience.

"If the territorial integrity of our country is threatened, to defend Russia and our people, we will use all means we have. This is not a bluff," Putin said in his address to the nation, according to a translation by the BBC. "Those who try to blackmail us with nuclear weapons should know that the prevailing winds can turn in their direction."

Russia's war with Ukraine has roiled global oil markets, as Western allies imposed sanctions and bans on Moscow and its energy exports. Brent crude surged above $120 a barrel in early March, not long after Russia began its invasion.

The tightness in markets has greatly driven an energy crisis in Europe, forcing countries like Germany and France to seek alternative sources of fuel before the winter months. There are concerns that a drawn-out conflict will put more pressure on oil and natural gas supplies.

Though this current temperament stands to raise prices, also weighing on crude oil prices are growing worries about a potential upcoming reduction in demand. Contributing to this decrease in demand is a slowdown in China's economy. Beijing has imposed a series of restrictions and lockdowns to curb the spread of COVID-19 that have hampered businesses.

This morning, however, John Lee, the city leader of Hong Kong announced that the city will be stopping their mandatory hotel quarantine for those travelling there from September 26th, in the hopes of helping the economy. The volatile global situation is causing oil prices to remain hard to predict in the short term.

As raised in last week’s blog, JP Morgan said that oil could shoot past $150 a barrel as demand outpaces supply. That's partly because companies haven't invested enough in future production, raising the prospect of a major supply deficit ahead.

Meanwhile, Amin Nasser, the CEO of Saudi Aramco, warned that an end to the war will not solve Europe's energy crisis and described European energy policy as a "chain of sandcastles that waves of reality have washed away."

In the UK, fuel retail prices dropped to the lowest levels since the spring. The largest ever monthly fall was recorded during August: a drop of 12.3 pence per litre. However, this week the RAC suggested that drivers are paying too much for fuel as retailers fail to pass on the fall in wholesale prices.

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