Institutions: Sanctions will not affect energy supply, and oil prices are expected to return to the $80 range

On Wednesday (February 23), Brent crude oil has fallen sharply from the previous session's high of nearly $100, and traded around
$93 during the day.
Brent crude has risen more than 20 percent so far this year, but more oil will enter the market in the second half of the year as the
Iran deal moves forward.
At the same time, despite the tense situation between Russia and Ukraine, most of the sanctions that have been taken so far, including Western Europe, exclude energy, oil and gas from sanctions
.
Platts expects that Russia's energy supply will not be interrupted
.
Based on market fundamentals, Platts expects crude oil prices to be more likely to be in the
$75-$85 range this year.

Oil prices are expected to remain elevated for the time being, but supply-side pressures are expected to ease soon

Driven by many factors, Brent crude oil futures rose as high as $
99 this week.
On the supply side, the recovery in oil supply has been limited, and the risk of supply disruption or even disruption in the oil market has raised investor concerns, while demand is still rebounding
aggressively as the impact of Omicron and other strains fades.

Wu Kang, head of global macro, demand and Asia analysis at S&P Global Platts, said: "From a seasonal perspective, first-quarter crude oil demand tends to be low, while from a fundamental point of view, the market will ease in the coming months (or even days or weeks) due to the current
tensions.
Oil supply pressures will be eased
.

Oil prices will remain elevated for the time being due to geopolitical risks, as well as potential concerns about supply and causing purchases to fill inventories
.
But looking ahead, Platts expects that despite the current tensions in Ukraine, the possibility of disruption to Russian oil supplies is not high
.
In addition, OPEC+ oil supply is expected to continue to pick up this year, and demand will also recover
.

Although Europe and the United States launched sanctions, they did not affect the energy sector

"So far, countries including Western Europe have taken sanctions, but energy (oil and gas) is basically outside the scope of sanctions, except for Germany's decision to suspend the approval of the
Nord Stream 2 project.
A senior State Department official said the sanctions were not intended to hit global energy markets
.
There is still considerable uncertainty, but it is likely that there will be no major disruption
to Russian oil supplies to the rest of the world.
”

Given that Russia controls pipelines and other means of energy supplies, especially in Eastern Europe, it is hard to believe how the EU can impose sanctions
on Russia over energy.

At present, Russia supplies nearly 2.
7 million barrels of crude oil per day to European countries, while also supplying some crude oil
to the United States.
It seems fine
now.
However, the situation on the ground is still developing, so there will be uncertainty
.
However, most of the oil supply is expected to remain largely unchanged, and based on this expectation, Platts believes that oil prices will fall as the Russia-Ukraine crisis eases
.

The Iran deal is progressing positively, and crude oil supply is expected to increase again in the second half of the year

On the other hand, another major global development that investors are concerned about has also led to a pullback in prices, that is, whether the Iran nuclear deal can reach consensus
.
Once an agreement is reached, the global energy mix is expected to usher in more and more oil supplies
.
While the market is focused on whether Russian oil supplies will be disrupted in the short term, the prospect of increased supply is expected to have a key impact
on the market in the medium term.

Wu Kang said: In the past few days, there have been positive developments in the comprehensive agreement on the Iran agreement, but in any case, Iranian oil is not expected to enter the market until after April-May at the
earliest.
Therefore, in the second half of the year, and even as early as May, if nothing else, oil supplies will increase
further.

Overall, based on market fundamentals, Platts expects oil prices to remain in the
$75-$85 range this year.