Whether the rise in oil prices is a temporary phenomenon or a long-term trend

Recently, international crude oil prices have continued to rise, among which the price of crude oil futures in the New York market hit the highest level since October 2014 on the 18th, which has aroused high market attention
.
Many analysts believe that the tightening of crude oil supply and demand may continue in 2022, which will support oil prices, but there are differences of opinion on whether oil prices will continue to rise for a long time
.

Three main reasons have pushed up oil prices

Experts generally believe that the recent rise in oil prices is mainly affected
by heightened geopolitical risks, easing of coronavirus measures and insufficient production in oil-producing countries.

Abu Dhabi, the capital of the United Arab Emirates, exploded a tank truck and an airport construction site fire
on the 17th.
As the third largest producer of the Organization of the Petroleum Exporting Countries (OPEC), the UAE's crude oil supply is considered to be at real risk of
disruption.
In addition, an oil pipeline connecting Iraq and Turkey was briefly interrupted by an explosion on the 19th, and tensions between Russia and Ukraine have not eased, which has also aggravated the market's concerns
about oil supply disruptions.

Fu Qiang, academic director of the Chinese EMBA at the National University of Singapore Business School, said that the market is extremely anxious about the escalation of geopolitical conflicts, which reinforces expectations for tighter crude oil supply in the future
.

Singapore's DBS Group pointed out in a report that a series of supply disruptions and geopolitical instability pushed London Brent crude futures prices above the $80 per barrel mark
.

In addition, the impact of the Omicron variant on crude oil demand was less severe than expected, and the easing of epidemic control measures in some countries led to an increase in crude oil demand, which pushed up oil prices
.

Weaker-than-expected production by some major oil-producing countries is another factor
in the recent rise in oil prices.
OPEC and non-OPEC producers reached an agreement
to cut production in April 2020.
Last year, the parties agreed to gradually increase production and raise total production by 400,000 barrels
per day per month starting in August.
However, some oil-producing countries have been unable to meet production targets
due to insufficient investment and other reasons.

Temporary phenomenon or long-term trend?

How long will high oil prices last? Will oil prices break above $100 a barrel? At present, analysts and experts have different
views.

The International Energy Agency recently released a report pointing out that as major oil-producing countries expand production, crude oil production will gradually catch up with demand, supply tightness is expected to ease, and the upward trend of oil prices will also slow down
.
The report believes that if OPEC and non-OPEC producers continue to phase out their production cuts, global crude oil production is expected to increase by an average of 6.
2 million barrels
per day in 2022.

UAE Energy Minister Mazroui told the media on the 19th that he will strive to complete the production increase target set by OPEC and non-OPEC oil producers last year, and is not worried about
the "short-term" crude oil price increase.

Lee Kwan-ho, an economist at OCBC Bank in Singapore, believes that the possibility of Brent crude oil futures rising to $100 per barrel by the end of this year is increasing, and "supply continues to be unable to keep up with demand, making the situation particularly tight"
.

Energy columnist Tsvetana Palaskova wrote that growing geopolitical risks, coupled with the obvious limitation of OPEC and non-OPEC producers' ability to increase production, mean that the market remains bullish
on international oil prices.

Wu Bingbing, director of the Institute of Arab Islamic Culture at Peking University, pointed out that in the medium and long term, the world is promoting the "dual carbon" action, and the upstream development investment of traditional fossil energy is decreasing, resulting in capacity constraints, which in turn will bring about a relative contraction of market supply, coupled with the rising growth of oil consumption, or will bring a window period of international energy price increases
.

At present, the world economy is still struggling to recover from the impact of the epidemic and is facing many challenges
such as inflation.
As an important industrial raw material, the impact of high oil prices on the economy cannot be ignored
.

Zhang Longxing, director of the oil product division of Shanghai Oil and Gas Trading Center, believes that for China, rising international energy prices will lead to increased imported inflationary pressure, increase production costs in manufacturing and other fields, and then weaken the competitiveness of
these industries.

Fu Qiang said that China is one of the world's largest crude oil consumers, and the rise in crude oil prices will increase economic operating costs
.