Tensions over Ukraine will continue to set the tone for oil markets in the coming months, with the European Union’s ban on most Russian imports undermining already tight global crude supplies, a Reuters poll showed on Tuesday.
A survey of 33 economists and analysts forecast Brent crude to average $101.89 a barrel in 2022, a slight increase from the consensus of $100.16 in the previous survey released in April.
With prices trading around $123 a barrel, the survey predicts that Brent will average $107.37 in the second quarter and gradually decline to $99.52 in the last quarter of this year.
U.S. crude was forecast at $97.82 a barrel in 2022, down from $96.21 previously forecast.
“With Russia showing no intention to withdraw its troops anytime soon, we expect tensions in the region to not be resolved until the end of the third quarter, thus prolonging price volatility over the next two quarters,” said Hetal Gandhi, director of CRISIL Research. .
More Russian oil is heading to Asia as many countries, including the United States, ban oil imports from Moscow following its invasion of Ukraine, while the European Union has also agreed on Monday to reduce oil imports from Russia by 90% by the end of this period. year.
“We believe that once the fine print of the EU ban becomes clearer in the coming days as to the timing and extent of the ban, we could see oil prices rise above $130. per barrel,” said Suvro Sarkar, senior energy analyst at DBS Bank.
Supply-side risks are counteracted by concerns over reduced fuel demand resulting from the Russian-Ukrainian conflict, COVID-19-related restrictions in China – the world’s largest oil importer – and high fuel prices .
Despite Western calls for a faster increase in oil production to rein in soaring prices, OPEC+ is expected to stick to last year’s deal at its June 2 meeting.
ANZ analyst Soni Kumari said the latest EU embargo would certainly worsen the oil supply backdrop and keep the market undersupplied between 1.5 and 2 million barrels per day in the second semester of this year.