Oil prices may repeat 14-year record

The European Union’s High Representative for Foreign and Security Policy said it would hold a meeting of EU foreign ministers this week if the 27 member states could not reach an agreement on the ban. oil from Russia. A special EU summit is also expected later this month and, if possible, ratify the ban.

Oil prices The world has increased by 5% last week. This increase is not too large, because the EU has only proposed and the ban will only take effect after 6-8 months. But in the long term, experts are saying that the pressure on the oil market will increase from now until the end of the year.

The hardliners in favor of accelerating the energy war with Russia in Europe say that this embargo will take effect too slowly, from now until the end of the year, Russia will find alternative customers to the EU.

However, in the opposite direction, if the ban is passed immediately without buffering, switching to find alternative sources, EU member countries will fall into a race to “collect oil” from everywhere, even even at all costs. Then demand will exceed supply, causing a fake shortage in the black gold market. Oil will therefore increase sharply, reaching 140 USD/barrel – a 14-year record that is expected to repeat from now until the end of the year.

“If it rises to 110 – 120 USD/barrel, the global economy can still sustain, but if it increases 130 – 140 USD/barrel, it will fall into recession. Investment banks they start to put scenarios. this into their investment decisions or to advise their clients,” said Dr. Ho Quoc Tuan – University of Bristol, UK.

Mr. Sergey Pikin – Director of the Energy Development Fund, Belgium said: “The embargoes are introduced for political reasons, but will have a big impact on the economy. Oil prices will then skyrocket. Consumers use will bear the greatest consequences”.

While, Organization of the Petroleum Exporting Countries and its partners (OPEC+) confirmed it would stick to plans to slightly increase oil output in June. Despite calls from Western countries, OPEC+ will only increase oil production by 432,000 bpd.

On the other side of the Atlantic, US Treasury Secretary Janet Yellen also assessed that Europe’s embargo on Russian oil would push up international oil prices, damage the fragile global economy and cause little effect on Russia because even though its exports are reduced, the country still benefits from higher oil prices. According to Yellen, what the West needs to focus on is limiting Russia’s revenue from selling oil and gas to other partners.

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