JPMorgan predicted in a note Thursday that Brent crude might end the year at $185 a barrel if Russian supply disruptions continue.
Oil prices rose significantly, with Brent crude nearing $120 earlier on Thursday as traders avoided Russian oil following Moscow’s invasion of Ukraine. US President Joe Biden is facing calls to ban Russian energy imports, but he has yet to impose full sanctions on oil.
JPMorgan analysts, including Natasha Kaneva, said in the note that 66 percent of Russian oil is currently struggling to find buyers.
Analysts said the magnitude of the supply shock is so large in the short term that oil prices need to reach $120 a barrel and stay there for several months, assuming there will be no immediate return to Iranian crude.
“With sanctions widening and the shift to energy security an urgent priority, there are likely to be repercussions for Russian oil sales in Europe and the United States, potentially affecting up to 4.3 million barrels per day,” the analysts wrote.
The bank maintained its price forecasts, which require the price of Brent crude to reach an average of $110 in the second quarter, $100 in the third quarter, and $90 in the fourth quarter.
Without Iranian oil returning to the market, the bank expects oil prices to average $115 in the second quarter, $105 in the third, and $95 by the fourth quarter.