MOSCOW, March 21. /TASS/. Fitch Ratings has raised its forecast for the average annual price of Brent oil from $70 to $100 per barrel in 2022, from $60 to $80 per barrel in 2023 and from $53 to $60 per barrel in 2024, the international rating agency reported on its website.
"Fitch Ratings has raised its oil and gas price assumptions for 2022-2024 reflecting significantly increased risks of supply disruptions of Russian hydrocarbons following the conflict in Ukraine, and the intention of Europe and some non-European countries to reduce their dependency on Russian fuel, increasing demand for supplies elsewhere and exacerbating market tightness," the agency says.
Fitch notes that in the pre-pandemic 2019, Russia produced 11.5 million barrels of oil per day, accounting for 12% of global production. Of these volumes, Russia exported 9.2 million barrels per day, with Europe accounting for 57%, China for 18% and the United States for 6%.
According to the agency, "several million barrels of oil per day could be removed from the market as a result of sanctions or counter-measures if the Russia-Ukraine conflict continues to escalate."
"Global demand and oil consumption have almost returned to pre-pandemic levels, while increases in OPEC+ supply have been in line with the previously agreed schedule, with another increase of 400,000bpd due in April," the agency says.
Nevertheless, Fitch maintains its long-term forecast: in 2025 and beyond, the price of Brent is expected at $53 per barrel. According to the agency, energy transition and lower production costs will help reduce the cost of oil. Fitch also notes that three-year forward contracts for Brent are $20 per barrel cheaper than current prices, reflecting market expectations for a rebalancing in the medium term.
Back at the beginning of this year, Fitch stated that there were no fundamental reasons for the steady growth of oil prices this year, and a further rise in prices could negatively affect demand and economic growth. At the beginning of the year, Brent prices went up sharply, breaking the $80 per barrel mark and adding about 15% in January, which was largely attributed to hopes that the new strain of coronavirus "omicron" would not lead to hard lockdowns.