Oil prices climbed higher and the trend is likely to continue as the Ukraine-Russia war is nowhere near resolution, independent think-tank Rystad Energy reports.
The combination of the ongoing war and financial as well as energy sanctions against Russia are expected to fuel the energy crisis further and keep oil prices above 100 US dollars per barrel or higher.
In parallel, the risks of supply disruption continue to drive oil prices up as well since outages in the region remain a high probability. The situation affects the Black Sea trade negatively too as 2 million (bpd) of Russian, Kazakh and Azeri oil that pass through the Novorossiysk terminal daily risk being subjected to a transportation disruption. Such occurrences can drive prices even further up.
On the demand side, in the short term perspective, “war implies an uptick in oil consumption to fuel the jets and tanks, and on the civilian side, as people flee by personal vehicles”, said Rystad’s Senior Oil Market Analyst, Louise Dickson. She also projected that the sustained period of high energy prices and accompanying inflation will carry negative macro impacts in social and political spheres.
