Even before the outbreak of war in Ukraine, the oil price kept climbing to new heights. But now the war is causing price explosions of historic proportions.
For many, the current situation brings back memories of the 1973 oil crisis, and indeed the International Energy Agency (IEA) sees global energy security threatened by the Putin war.
A record high in the oil price has long been in sight, but even the experts do not trust themselves to make a serious forecast on the further price development at the moment.
Russian oil trade almost completely stopped
In general, experts believe that the oil price will continue to rise in the coming weeks. Due to the strong dollar, the oil price was already on the rise before the outbreak of the war in Ukraine.
In the meantime, the price of oil has already reached a multi-year high. But an end is far from in sight. The rapid rise in prices since the start of the war is mainly due to the general sanctions against Russia.
In 2020, Russia was still the world’s second largest producing country. About half of the oil produced in Russia has so far been exported. Russia thus covered about 12.6 percent of the world’s oil supply.
Meanwhile, many of the sanctions imposed on Russia are having an effect. Nevertheless, there are still no official sanctions against the Russian oil market. Nevertheless, almost all Russian oil trade has already stopped, because even without official sanctions, Russian oil companies can hardly find foreign buyers.
Record high could be reached
In July 2008, the oil price reached a record high of $147.40 per Brent crude. Many experts believe that the oil price could reach and even exceed this highest level ever before the end of this year due to the current situation.
At the moment, the oil price is skyrocketing so rapidly that quite a few people feel reminded of the oil crisis in 1973. At that time, too, there was a real price explosion within a few days.
Global energy security at risk?
Many market participants already fear a complete loss of Russian oil supplies – be it due to Western sanctions, or due to a supply stop on the part of Russia. At the same time, OPEC continues to refuse to increase production beyond the agreed amount of 400000 barrels of oil per day.
In view of this, the International Energy Agency (IEA) sees global energy security at risk. The current situation is also likely to ensure extremely high oil prices in the long term, as well as a further increase in inflation worldwide.
But at the moment, few analysts dare to make a serious forecast about how exactly the oil price will develop in the coming weeks and months, because at the moment no one can predict how the situation in Ukraine and also the attitude of OPEC will develop.