The "oil war" is here again! What will happen to oil prices next?

As the situation between Russia and Ukraine continues to be tense, Western countries' sanctions against Russia extend from "financial war" to "oil war", and the direct impact of the "oil war" is that international oil prices fluctuate sharply, hitting a 14-year high
.

The price of crude oil rose by more than $30 in 10 days, which may not be the end

On March 7, the price of Brent crude oil futures once touched a high of $139.
13 / barrel; WTI crude oil futures briefly exceeded $130 a barrel, both hitting new highs
since 2008.
Subsequently, it continued to fluctuate
at a high level on the 8th and 9th.

And on February 28, the main contract price of Brent crude futures in London closed above
$100 per barrel for the first time since September 8, 2014.
In less than 10 days, international oil prices touched a high of $130 per barrel from $100 per barrel
.

Brent crude oil chart

However, this may not be the end of oil prices
.
OPEC Secretary-General Barkindo recently warned that OPEC cannot control the rise
in global oil prices.
Goldman Sachs expects oil prices to reach $
150 a barrel.

Russia is the world's second largest oil producer
.
For example, in December 2021, Russia's combined exports of crude oil and refined products were 7.
6 million b/d, of which 5 million b/d of crude oil and condensate, accounting for 64% of total global exports; Exports of petroleum products totalled 2.
85 million b/d
.

A few days ago, Russian Deputy Prime Minister Alexander Novak warned that the West's abandonment of Russian oil will have disastrous consequences for the world market, and the surge in oil prices will be unpredictable and may even exceed $
300 per barrel.

The West and Russia, from the "financial war" to the "oil war"

On February 26, the United States and Europe decided to exclude some Russian banks from the Society for Worldwide Interbank Financial Telecommunication (SWIFT) payment system
.
In the face of the "financial nuclear bomb" thrown by the United States and Europe, Russia has taken countermeasures and launched a "financial counterattack war"
.

As the situation between Russia and Ukraine continues to intensify, the United States and Russia are entering the contest of the "oil battlefield"
.

U.
S.
President Joe Biden signed an executive order at the White House on March 8 announcing that the United States has banned imports of Russian oil, liquefied natural gas and coal
due to Ukraine.

Biden at the White House on March 8

In addition to the United States, the United Kingdom
is also following suit.
The country announced plans to stop importing Russian oil and corresponding oil products by the end of 2022 to further strengthen sanctions against Russia, and the ban also applies to refined products such as diesel, but not to natural gas
.

The European Union has proposed cutting gas
imports from Russia.
On March 8, local time, the European Commission proposed that EU countries cut their natural gas
imports from Russia by two-thirds this year.
But the proposal would need the unanimous consent of the EU's 27 member states to enter into force
.

Previously, Germany, the Netherlands and other countries have clearly expressed their opposition to
energy import bans.
According to EU data, Russia's share of coal imports in the EU is 46%, natural gas is 45%, and crude oil is 27%.

If energy imports are drastically reduced, it may have a considerable impact
on local people's livelihood and prices.

"In moving forward with this ban, we know that many European allies may not be able to join us
.
" Biden's speech on the 8th emphasized the unity of the United States and Europe on the one hand, and also implied Europe's dependence
on Russian energy on the other hand.

Is there a winner in the "oil war"?

According to Xi Jiarui, an analyst at Jinlianchuang, data from the US Energy Information Administration (EIA) shows that in 2021, Russian crude oil accounted for about 3% of total US crude oil imports, plus other petroleum products, Russian oil accounted for about 8%
of US oil imports last year.

Biden said he will continue his efforts to reduce the pressure
on American households due to rising energy prices.
The U.
S.
government has pledged to release more than 90 million barrels of the Strategic Petroleum Reserve
this fiscal year.

On March 6, local time, a car owner refueled his vehicle in San Mateo County, California, USA

However, the United States, as a "country on the car", on the one hand bans the import of Russian energy, on the other hand, to reduce the impact on consumers, in fact, it may be difficult to do
.
The US ban has exacerbated panic among global investors, causing European and US stock markets to continue to decline
in recent days.

On the day the U.
S.
government announced its ban on Russian oil, the American Automobile Association showed that the average gasoline price in the United States rose to $4.
173 per gallon, breaking the record
high set in July 2008.
Regular gasoline prices rose 15 percent over the past week, the biggest weekly increase in nearly 20 years
.

Not only in the United States, but also across Canada, oil prices have continued to rise recently and break historical records
.
Under the influence of multiple factors such as the epidemic and the conflict between Russia and Ukraine, Canada is facing obvious inflationary pressure
.

On March 6, local time, fuel prices at a gas station in Toronto, Canada, reached a new high

In Europe, some petrol stations already sell petrol and diesel
for more than 2 euros per liter.
For an average car, it costs 100 euros to fill up a tank of gas, and buying a bike with a tank of gas will gradually become the norm
.

According to market expectations, Russia's crude oil exports may decrease by 1-2 million b/d in March, and if the current sanctions are followed, the final global supply gap
will be 5-7 million b/d.
OPEC believes that global spare capacity will not be enough to cover the shortfall
.

Yan Jiantao, chief analyst of Jiecheng Energy Holdings Co.
, Ltd.
, told reporters that from the historical data, when energy expenditure accounts for 7% of global GDP, equivalent to oil prices of about $150, consumption growth is faster than economic growth, exceeding consumers' ability to pay, often means economic decline
.

According to He Weiwen, a senior researcher at the Chongyang Institute for Financial Studies at Chinese Minmin University, US natural gas production has been growing rapidly in
the past few years.
With the outbreak of the Ukraine crisis, the United States can take advantage of the situation to cut off Russian gas shipments to Europe, opening the market
for American natural gas.

Some people believe that the conflict between Russia and Ukraine may lead to the reconstruction
of the global energy production map.
The "energy discourse" of the United States and Saudi Arabia in the "troika" of global oil and gas supply will be significantly improved
.