(Reuters) – Brent crude from the North Sea could rise above $150 if Russian oil exports sharply decline, analysts at Bank of America (BofA) Global Research said on Friday.
Oil prices soared after the invasion of Ukraine by Russia on February 24: the barrel of Brent had exceeded 139 dollars on March 7, the first time since 2008, and that of American light crude (West Texas Intermediate, WTI ) rose to $130.5 on the same date.
They were moving respectively around 117 dollars and 113 dollars this Friday around 11:40 GMT.
“With our Brent target of $120 a barrel now in sight, we believe a sharp contraction in Russian oil exports could (…) push Brent well past $150 a barrel,” BofA said. in a research note.
The European Commission proposed three weeks ago to gradually impose an embargo on Russian oil as part of a new set of sanctions, to which Hungary, Moscow’s closest ally in the EU, opposes.
BofA estimates that the average Brent price this year will be $104.48 per barrel and $100 in 2023.
Analysts say demand is unlikely to return to pre-pandemic levels this year as supply issues persist.
“An increase of $30 per barrel this year has reduced demand by 1.5 million barrels per day, which does not allow for a return to pre-COVID levels,” BofA analysts said.
They estimate that demand could approach pre-COVID levels next year if Russian production remains at nearly 10 million barrels per day and supplies from OPEC+ countries increase.
(Ashitha Shivaprasad report in Bangalore, French version Laetitia Volga, edited by Sophie Louet)
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