Moody’s said that the ratings of oil-exporting countries will benefit from Crude price hikebut only in the short term, because it will remain vulnerable to a drop in demand for oil in the future, and a decline in prices, especially when geopolitical tensions subside.
The agency expected oil to return to decline, with an average price of around $68 next year, and to decline further in the following years.
Moody’s indicated that high oil prices are unsustainable, as it will destroy demand, return prices to a downward path, and accelerate the trend towards alternative energy sources.
Oil prices continued to rise, today, Tuesday, with the continuation of the Russian-Ukrainian war, and the imposition of more sanctions on Moscow and Belarus, in addition to Russian warnings of a major jump in prices.
Brent crude futures for May delivery rose 3.68% to $127.75 a barrel, while US crude futures for April delivery rose 2.93% to $122.9.
On Monday, oil prices jumped to their highest levels since 2008, while the United States and its European allies are considering banning crude imports from Russia, while a quick return of Iranian crude to global markets appears less likely.