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Opinion
Javier Blas

The Oil Price Shock Will Reverberate Into Next Year

There’s no end in sight for the price spike as supply struggles to keep up with demand.

Refineries are running at full capacity to keep up with demand.

Refineries are running at full capacity to keep up with demand.

Source: Bloomberg

Wall Street may be abuzz with talk of recession next year, but it’s a different story in the energy market. Most traders, policy makers and analysts see oil demand growing through 2023 and supply struggling to keep pace.

In private, Western officials worry Brent crude will reach $150 a barrel soon from about $120 now. Some fear it keeps going higher, with wild chatter about oil hitting $175 or even $180 by the end of 2022, driven by post-Covid pent-up demand and European sanctions against Russia. And the shock won’t end this year.