Oil prices have risen back above $100 a barrel on speculation that oil supplies will tighten after Russia struggles with Western sanctions.
Commodities trader Pierre Andurand expects oil prices to rise as high as $200 per barrel this year, he told Bloomberg News.
Andurand sees the current market environment as predisposing to rising oil prices and argues that oil prices need to rise to $200 per barrel to reduce demand. He estimates that about 4 million barrels of crude oil per day have been cut since Russian troops invaded Ukraine.
“I don’t think that suddenly they stop fighting, the oil comes back. It’s not going to be the case. The oil’s going to be gone for good. We’ll have to live with higher prices to keep demand down,”said Andurand to Bloomberg.
He expects that the sanctions on Russia will open a big gap in the oil supply. Although the Middle East could produce 1.5 million barrels a day more, the gap would still be 2.5 million barrels a day.
Yesterday, hopes for an early end to the war were severely dampened as there are now reports that the peace talks between Russia and Ukraine have made no progress. This was confirmed by a Kremlin spokesman.