The surge in prices was significantly blunted at the end of the evening, after the announcement of new sanctions against Moscow by American President Joe Biden.
(Boursier.com) — It was only a matter of time. Eight years later, the barrel of oil returned to the $100 mark on Thursday, after the invasion of Ukraine by the Russian army… Brent even hit $105 in London in the morning, before fall back just above the $100 mark at the close.
The barrel of Brent thus crossed $100 on Thursday for the first time since 2014, before ending up more modestly by 2.3% at $99.08 a barrel (April deadline). The barrel of crude WTI ended up 0.8% at $92.80 (April expiry) after breaking above $100 earlier in the day.
The surge in prices was significantly blunted at the end of the evening, after the announcement of new sanctions against Moscow by American President Joe Biden. At this stage, he did not mention an eviction of Russia from the Swift international payment system, nor additional sanctions regarding the Russian energy sector.
The European Union, like the United States, announced Thursday evening new sanctions against Moscow, and also decided not to deprive Russia of access to the Swift international interbank payment system. Such a decision could disrupt Germany’s gas supplies: the German Finance Minister, Christian Lindner, declared on Thursday evening on the ‘ARD’ channel that a Russia’s exclusion from the Swift system “would mean a high risk that Germany would no longer receive gas deliveries and other raw materials” from Russia…
If the black gold market has been supported for many weeks by a notorious imbalance between supply and demand, Vladimir Putin’s decision to launch a military operation in Ukraine has accelerated the movement. In a tight market, with oil supplies failing to keep pace with a vigorous recovery in consumption as the coronavirus pandemic recedes, this war in Europe will only further strain the situation on the global energy market.
A barrel of Brent permanently above $100?
Russia is the world’s second-largest oil producer, selling mostly its crude to European refineries, and Europe’s largest supplier of natural gas, supplying around 35% of its supply. “It’s not just the geopolitical risk that’s the problem, but the added pressure on supply,” Howie Lee, an economist at Reuters, told Reuters. OCBC. “Russian oil supply will vanish overnight if it faces sanctions…and OPEC cannot produce fast enough to cover this gaping hole.”
Under these conditions, Japan and Australia said on Thursday they were ready to exploit their oil reserves, along with other member countries of the International Energy Agency, if global supplies were reduced by hostilities. in Ukraine.
“Brent prices are likely to rise above $100 a barrel until significant alternative supply sources become available, such as an Iranian nuclear deal or more US shale,” analysts note.Eurasia Group.
Crude is likely to average $110 in the second quarter of the year if the conflict in Ukraine escalates, warned earlier this week JP Morgan Chase.