Oil prices have continued to skyrocket this week—with Brent crude rising briefly above $100 per barrel for the first time since 2014—as Russia launched its invasion of Ukraine, and although prices moderated somewhat Friday, experts warn that it could rise to more than $130 amid the fallout from the conflict.
Oil prices are sitting near seven-year highs after a two-month rally amid fears that the escalating conflict between Russia and Ukraine will cause severe global supply disruptions.
As Russia launched its invasion of Ukraine on Thursday, the price of European benchmark Brent crude spiked to $105 per barrel—up 47% since December 20 to its highest level since July 2014, while US benchmark West Texas Intermediate crude surged 47% over the same period to $100 per barrel—with analysts now warning that prices could skyrocket much further.
Oil prices could hit $125 per barrel by this summer, according to a note from Goldman Sachs analysts on Friday, who predicted that the Russia-Ukraine conflict, as well as “uncertainty around potential sanctions,” could create a “supply shock” in global energy markets, which are already in tight supply.
With the conflict set to jeopardize global supplies, Brent crude prices could “approach $130 per barrel by June” and that estimate “could be soar higher if additional disruptions materialize,” Louise Dickson, senior oil market analyst at Rystad Energy, similarly argues in a recent grade.
JPMorgan recently predicted that if Russian oil and natural gas exports declined as a result of the conflict, Brent crude could average $115 per barrel during the second quarter of 2022, before falling back below $100 by the end of the year.
Oil prices moderated somewhat on Friday, however, in large part because the United States and other Western allies have so far been reluctant to target Russia with tough energy sanctions, as it is the world’s second-largest oil producer and a major natural gas provider for Europe.