Oil prices are rising sharply higher after the West imposed tougher sanctions on Russia, blocking Russian banks from SWIFT, (the international payments system)
- Fears that these moves will disrupt supply, in an already tight market have pushed oil prices back over $100 per barrel.
Without being part of the international payment systems, the possibility of exporting commodities, including oil is greatly reduced.
Goldman Sachs have upwardly revised their one-month Brent price forecast to $115 a barrel, up from $95.WSJ finds
In order for oil prices to fall a sustained increase in oil supply is needed.
The news last week that the US was looking to work with other nations to release more reserves into the market helped bring oil prices off fresh 7 year highs
*Statista chart on rally of oil prices since Russian invasion of Ukraine
According to OPEC, the jump in oil prices over $100 doesn’t actually reflect an imbalance between supply and demand.
Although this stance could still change should Russia experience problems exporting its oil owing to some Russian bank being excluded from SWIFT.
The broad expectation is that OPCE+ is likely to stick to its current plan of raising oil output gradually, by adding 400,000 bpd extra a month, even after the latest Russia, Ukraine developments.