Oil Prices Surge, Increasing Talk Of "Economic Destruction" Oil prices have soared, breaking the $100 per barrel barrier and on their way to the $120-$150 range, analysts say. The jump is triggering recession fears and could derail the...

Oil prices have soared, breaking the $100 per barrel barrier and on their way to the $120-$150 range, analysts say. The jump is triggering recession fears and could derail the economic recovery of several countries, as the Russia-Ukraine conflict rages in Europe with a nuclear world on the table.

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Oil Prices Jump

As reported by CNBC, a note by Sankey Research says that oil prices could skyrocket to $150 per barrel until the Ukraine invasion ceases. A drop in supply could mean the world would edge closer to an economic recession.

Expert Paul Sankey asserts: "I'm concerned that we don't have enough oil at all here, and we need to go to $120 to $150 [per barrel], and then we get into economic destruction."

On Thursday, Brent oil moved up by 5% to tickle the $120 per barrel mark and later stabilize at $114 —an increase of almost 20% in seven days. Coal and natural gas prices are also mounting amid the Russian sanctions imposed by the West.

Shane Oliver, head of investment strategy at fund manager AMP, told Reuters: "Russia supplies around 30% of Europe's gas and oil imports and accounts for around 11% of world oil production. In short, investors are worried about a stagflationary shock."

Effect

Sankey asserted that OPEC and its allies could have stuck to their slight production rise in April, as it was initially planned. The release of emergency stocks to cover the demand was not the right move, he says, as this leaves Western nations with even lower stocks.

He adds, "By the same token, if Saudi and the UAE run down their spare capacity, well, you don't know what's going to happen next."

Then, oil prices could reach $200 per barrel if —in reference to Iraq and Libya— "any risky supply source might go missing," which leaves OPEC+ "probably just sitting on their hands here, to see how this plays out."

Considering the impact of oil prices on inflation, "we think it is most likely that headline consumer prices will peak within the next one or two months," Mark Haefele, Chief Investment Officer, UBS Global Wealth Management, says.