Oil prices could hit $240 per barrel this summer in the worst-case scenario, if Western countries roll out sanctions on Russia’s oil exports, Rystad Energy said in a note on Wednesday.
“Market volatility is at an all-time high, with prices surging on the expectation that supply will further tighten due to restrictive sanctions on Russian energy from the West,” said Bjørnar Tonhaugen, Head of Oil Markets, at the Oslo-based consultancy.
He said while it was not the most likely scenario, traders, analysts and decision-makers alike should prepare for elevated prices based on the current landscape.
“This is the largest energy crisis in decades and the impact on the world’s most important commodity is going to be unprecedented.”
Oil prices jumped to their highest levels since 2008 on Tuesday after President Joe Biden announced that the US would ban crude, gas and coal imports from Russia as part of the sanctions imposed on the country following its military offensive in Ukraine.
ICE Brent, the global benchmark for two thirds of the world’s oil, was last trading at $114.81 a barrel, after dropping 13 percent in the previous session in its biggest one-day drop in nearly two years. West Texas Intermediate, which tracks US crude, was at $110.20 at 8:45 am UAE time on Thursday.
Goldman Sachs Commodities Research also lifted its Brent price forecast for 2022 to $135 per barrel from $98, amid the geopolitical tensions.