Speaking on Bloomberg Surveillance, global commodities head at Bank of America, Francisco Blanch, expects Brent crude oil to soar to $150 a barrel by this summer, with a probable “ugly scenario” leap beyond $200 per barrel if European countries implement oil sanctions on Russia. Despite the expectation that the war will be lengthy and have long-term ramifications for the commodities markets, some analysts believe Brent could rise above $150 per barrel by June before swiftly going back down. According to the commodity guru: Mr Blanch noted:
Oil prices could get a lot worse
When it comes to the petroleum product markets, Blanch noted things are not looking good and might yet become much worse. In fact, he pointed out diesel prices right now have already surpassed the high peaks reached in the year 2000 and 2008. The commodities expert opined: In terms of the worst-case scenario, or what the global commodities head at Bank of America calls the ‘ugly scenario’ would be $200 a barrel or more.
EU debates on banning Russian oil
As a result, BofA head notes imposing limitations on Russian exports has proven tough since sanctioning a very significant commodity producer like Russia would eventually result in you paying a higher price as a large importer, which the European Union notably is. Thus, limiting energy supplies from your main supplier, Russia (which delivers around one-third of Europe’s energy), would effectively result in an increase in energy prices that are already near record highs. Finally, as the European Union is debating whether or not to ban Russian oil, Finbold reported on March 22 due to the current situation around oil, Saudi Arabia has announced it invested $50 billion to increase its oil production capacity. Watch: BofA says oil could rise above $200 a barrel
