Calgary, Alberta (February 24, 2022) — Enverus Intelligence Research, a part of Enverus, the leading global energy data analytics and SaaS technology company, has released a new report that examines the impacts Russia’s invasion of Ukraine will have on oil prices, the effectiveness of Western sanctions and potential political fallout.
“While we see energy sanctions as a big leap for Russia-dependent euro economies, Brent prices exceeding $100/bbl imply the loss of ~1.5 MMbbl/d, which is tighter relative to our base model,” said Ian Nieboer, report author and managing director of Enverus’ Global (International) Energy Analytics business. “This amounts to about 20% of Russian crude and refined product exports. Whether that is accurate will depend upon the coordination of Western sanctions, battlefield developments and whether President Vladimir Putin decides to wield the energy weapon himself.”
“Benchmark oil prices have incorporated a meaningful geopolitical risk premium — perhaps $10-$15 — so far this year. The combination of slow-to-arrive, but still expected, U.S. supply growth, shrinking OPEC spare capacity, and strong demand amid increasing geopolitical tensions focused on — but not exclusive to — Russia and Ukraine have driven prompt Brent toward $100. The arrival of hot conflict last night is pushing crude prices past that mark,” Nieboer said.
Key takeaways from the report:
- Brent prices exceeding $100/bbl imply the loss of ~1.5 MMbbl/d tighter relative to our base model. This amounts to ~20% of Russian crude and refined product exports.
- The combination of slow-to-arrive (but still expected) U.S. supply growth, shrinking OPEC spare capacity and strong demand amid increasing geopolitical tensions focused on (but not exclusive to) Russia and Ukraine have driven prompt Brent toward $100/bbl.
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About Enverus Intelligence Research
Enverus Intelligence Research, Inc. is a subsidiary of Enverus and publishes energy-sector research that focuses on the oil and natural gas industries and broader energy topics including publicly traded and privately held oil, gas, midstream and other energy industry companies, basin studies (including characteristics, activity, infrastructure, etc.), commodity pricing forecasts, global macroeconomics and geopolitical matters. Enverus Intelligence Research, Inc. is registered with the U.S. Securities and Exchange Commission as an investment adviser.