Brent Oil to skyrocket towards $135 on war and effective sanctions on Russia – Rabobank

A Ukraine war has the potential to be a major market-mover given Russia’s dominant position as a global energy supplier. Economists at Rabobank consider scenarios whereby Russian energy exports to Europe are (partly) cut-off and re-routed to Asia.

War

“War would result in Brent spiking as hoarding, increased transit costs, and the geopolitical risk premium spikes. The last major oil supply disruption to Europe was during the 2011 Libyan civil war. Brent prices spiked from $90 to more than $125 over four months.”

War and effective sanctions

“War and effective sanctions would see oil at $135 and higher for far longer.”