Fitch raises oil price estimate by $ 30

Fitch has steadily raised its oil price estimates in the medium term, on the basis of the new environment of increased risks created by the Russian invasion of Ukraine.

In particular, Fitch now places the Brent price in 2022 at $ 100 the $ 70 a barrel previously projected for 2023 estimates that it will move to $ 80 against $ 60 previously, while for 2024 it slightly upgrades the estimate to $ 60. from $ 53 previously.

For 2025 and in the long run maintains the estimate at their levels $ 53 of the barrel.

Respectively, for the American WTI revises its estimate at $ 95. from $ 67 in 2022, at $ 76 from $ 57 in 2023 and on $ 57 from $ 50 in 2024, while maintaining the estimate for $ 50 in 2025 and in the long run.

As Fitch’s report points out, its review reflects the significant increased risks of disrupting Russian hydrocarbon supplies following the conflict in Ukraine and the intention of Europe and some non-European countries to reduce their dependence on Russian fuel, thus increasing demand for supplies from other sources that will further push the market.

The report, however, estimates that there are several sources of additional crude oil supply that could eventually alleviate market shortages.

In particular, Saudi Arabia and the United Arab Emirates have an additional production capacity of about 2 million and 1 million barrels per day, respectively, although they have not pledged to increase their production to compensate for possible losses of Russian crude.

Discussions on easing sanctions against Iran could add up to about 1.5 million barrels a day, as against Venezuela, although it is unclear to the Latin American country how much it can contribute due to insufficient investment in its oil infrastructure.

Finally, some of Russia’s supplies could be diverted to countries with a reduced likelihood of imposing sanctions, freeing up volumes of the rest of world oil production for countries that have already imposed them.