CRUDE OIL IN THE NEXT 5 YEARS: WILL IT RISE OR FALL
BRENT PRICE DEVELOPMENT & KEY INFLUENCES:
The war between Russia and Ukraine and concerns that a potential global recession would reduce demand affected the price of international benchmark Brent crude oil in the first half of 2022.
After trading between $77 and $79 a barrel in the final weeks of 2021 and the first few months of 2022, Brent jumped over $100 in mid-February as a result of Russia’s invasion of Ukraine. In reaction to US President Joe Biden’s restriction on Russian fossil fuel exports, it increased to $139.13 on March 7.
The benefit was short-lived. By mid-March, Brent had fallen below $100 due to concerns over demand after China, the largest oil importer in the world, implemented additional Covid-19 lockdowns.
As additional nations followed the US in banning Russian oil imports and as it became increasingly likely that China would relax its Covid-19 limitations, the price steadily rose back over $100.
On June 14, Brent rose to $125 per barrel for the first time since March 9 as concerns about slow global economic growth were overshadowed by limited supply.
All seaborne imports of Russian petroleum products, which account for 90% of the bloc’s current imports of Russian oil, have been outlawed by the EU. The restriction is a part of broader international measures against Russia for its invasion of Ukraine.
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