Military attack Russia ke Ukraine and tough US and western sanctions against the red bear country are projected to have a major impact on economy world. One of them, energy crisis.
quote CNN.com on Thursday (10/3), Goldman Sachs Strategist in his report said the uncertainty in the conflict would have an impact on the world oil supply crisis.
In its development, the United States announced a ban on imports of Russian oil. The move was followed by Britain, which promised to phase out Russian oil imports by the end of this year.
“Given Russia’s key role in global energy supply, the global economy could be faced with one of the largest energy supply shocks ever,” Goldman Sachs added in the report.
Meanwhile, Rystad Energy projects that if other western countries follow America’s lead en masse and ban Russian oil, crude oil prices will skyrocket to $240 per barrel this summer.
Biggest Supply Shock Since 1990?
Goldman Sachs said the Russia-Ukraine crisis could cripple at least 3 million barrels per day of Russian exports of oil and oil products by sea.
The condition is likely equivalent to a month’s disruption, the fifth largest since World War II, following the 1973 Arab Oil Embargo, the Iranian Revolution in 1978, the Iran-Iraq war in 1980, and the Iraq-Kuwait war in 1990.
So far nothing has been able to keep up with Russia’s oil supply. Even after the release of emergency oil reserves, higher oil production from OPEC and the potential for lifting of sanctions against Iran and Venezuela, Goldman Sachs assesses that the world oil market will still not be stable.
In other words, the world will be forced to use less oil. Goldman Sachs also expects Brent to be $135, up from $98 previously.
“The range of possible outcomes remains extreme, given the threat of a spike in oil prices representing the global economy,” wrote Goldman Sachs strategists.
What about US oil companies?
US oil production is expected to increase significantly in response to higher prices. The US Energy Information Administration (EIA) said US oil production is expected to rise to an average of 12 million barrels per day this year.
The figure was consistent with the EIA’s earlier forecast in February, before oil prices surged to their highest level since 2008.
However, the EIA significantly raised its forecast for U.S. oil production in 2023 and said the average would yield 13 million barrels, up from its previous estimate of 12.6 million. Meanwhile, the annual record for US oil production was set in 2019, when 12.3 million barrels of oil were produced daily.
(dzu/one)
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