Oil prices will “certainly” hit $120 a barrel if Russia invades Ukraine, and the global economy will be “radically altered,” veteran strategist David Roche told CNBC on Monday. He referred to uncertainty over Moscow’s next steps as “the ghost in the room” – one with the potential to massively disrupt global markets.
“I think if there was an invasion of Ukraine and there were to be sanctions which impeded either Russia’s access to foreign exchange mechanisms, messaging systems and so on, or which prevented them from exporting their commodities, either oil or gas or coal, I think at that point in time you would most certainly see oil prices at $120 [a barrel],” he said.
The price of oil has recently recovered from its 2020 pandemic lows, with benchmark Brent crude trading at over $90 a barrel on Wednesday, its highest level since 2014. US West Texas Intermediate (WTI) was also up, at over $89 a barrel.
Roche argued that if Moscow did do “something dramatic about Ukraine,” then Washington and its allies were likely to impose harsh sanctions on Russia, and European equity markets and the outlook for the global economy would be “radically altered.”
Over the past several weeks, Western media and some top politicians have repeatedly claimed that Moscow is gearing up to attack its neighbor. Russia has consistently rejected the claims, and no evidence to back up such allegations has yet emerged. US lawmakers have said they are devising the “mother of all sanctions” against Russia as a method of defending Ukraine that would be “crippling to [the Russian] economy.” British and German ministers have also warned of economic consequences for Russia.
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