The international rating agency Fitch Ratings has raised its estimate of the cost of oil for the coming years due to supply disruptions and increased demand for fuel amid the weakening of the COVID-19 pandemic.
“The European Union has banned imports by sea from Russia, so it will have to replace about a third of all oil imports with supplies from other regions, while large volumes of Russian oil will go to India and China,” the agency said.

However, the use of spare capacity and the redirection of trade flows will eventually reduce pressure on the supply of oil in the world, so prices will be more moderate in the future. “Our long-term assumptions about oil prices have not changed,” Fitch analysts note.

At the same time, the forecast of gas prices in Europe for 2022-2025 has been raised.

“The EU seeks to reduce its dependence on Russian gas supplies, mainly by increasing the supply of liquefied natural gas (LNG) in the short term. Prices will be additionally supported by physical interruptions in gas supplies and Russia’s demand to make payments in Russian rubles, the refusal of which may lead to a halt in supplies,” the report says.

At the same time, the supply crisis in Russia has accelerated the energy transition in Europe, so analysts have kept long-term estimates of the cost of gas in the region unchanged.

The average annual price of WTI crude oil this year is now projected at $ 100 instead of $ 95 per barrel, in 2023 – $ 81 against $ 76, in 2024 — $ 62 instead of $ 57. The forecast for 2025 is maintained at $50 per barrel.

Gas prices in Europe, according to the agency’s expectations, in 2022 will be $ 25 per 1,000 cubic feet instead of $ 20 in the previous forecast, in 2023 — $ 15 instead of $ 10. The forecast for 2024 has been raised to $10 from $ 7, and for 2025 — to $7 from $ 5.