Oil price surge: Expert warns of 'critical situation' as soaring costs cripple motorists

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Head of commodity trader Trafigura Jeremy Weir said energy markets were in a “critical” state following the tough sanctions imposed on Russia as a result of the invasion of Ukraine.

Mr Weir also forecast a rise in prices to $150 (£119) or more per oil barrel due to the strain on supply chains.

He told the FT Global Boardroom conference on Tuesday: “I really think we have a problem for the next six months . . . once it gets to these parabolic states, markets can move and they can spike quite a lot.”

A parabolic state is what happens when a rising price suddenly surges to previously unseen levels, as seen on the right hand side of a parabolic curve.

Brent crude is currently trading at $120 (£95) per barrel, although at the height of the 2008 financial crash it hit a shockingly high $147 (£117) per barrel.

Many experts fear that the worst of this current crisis is yet to come, as supplies become scarcer and Russian production falls.

JPMorgan chief executive Jamie Dimmon warned that oil prices could reach $150 (£119) or even $175 (£139) per barrel this year.

Analysts at Goldman Sachs have forecast that oil could average out at over $140 (£111) per barrel in the third quarter of 2022.

Prices of other commodities such as gold and lithium are also climbing, which could force a global slowdown to curb growth.

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The European Union’s plan to phase out Russian oil and bar seaborne imports is also likely to cause production to fall further.

The Opec+ alliance, led by Saudi Arabia, has agreed to accelerate oil production in a bid to meet global demand.

Mr Weir added that there seems to be little sign of demand for oil slowing down in spite of skyrocketing petrol prices around the world.



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