Oil prices could reach $150 a barrel or more, with demand destruction likely by the end of the year, according to global commodities trader Trafigura

  • Oil prices could hit $150 a barrel this year, Trafigurasaid the CEO on Tuesday.
  • “If we see very high energy prices for a period of time, we will eventually see demand destruction,” he said. Jeremy Weir.

Oil prices could hit $150 a barrel in the coming months, and the market could start to see demand destruction by the end of the year, Trafigura CEO Jeremy Weir said on Tuesday.

The head of the global commodities trading firm warned that rising commodity prices would likely dampen economic activity, which would eventually dampen demand.

“If we see very high energy prices for a period of time, eventually we will see demand destruction,” he told the FT Global Boardroom conference. “It will be problematic to maintain these levels and continue global growth.”

U.S. crude prices climbed 1.4% to $120.14 a barrel, and Brent crude rose 1.4% to $121.18. China is expected to add to price pressures as the country continues to ease COVID-19 lockdown restrictions.

Oil prices hit their highest level since 2008 last March after Russiathe invasion of Ukraine. The war in Europe has upset the world’s energy markets and has pushed prices higher as Europe tries to wean itself off Russian energy.

The EU and the United States has targeted Russian oil with strong punishments. But Russia has unloaded its supply elsewhere with deep discounts to mitigate some of the effects of the sanctions.

Weir added that Trafigura has largely cut Russia off from its business relationship, telling the FT that Russian sourcing was only around 6% of its business before the war and that it “has dropped by that amount”. Trafigura changed its export rules after the invasion to meet European energy needs only.

Steve R. Hansen