Oil Likely to Hit $121 a Barrel when China Fully Reopens, Says Analyst

S&P Global vice chairman Dan Yergin expects oil prices may reach $121 per barrel when China fully reopens, but warns that three key risks remain.

The S&P Global vice chairman said, “Our base case for 2023 is $90 for Brent but you have to look at other cases,” adding that the three key risks are the decisions made by the Federal Reserve regarding rate hikes, the demand from China, and Russia’s reaction to price caps launched by the EU and its allies.

“If China gets over Covid … then you add a lot of demand to the market,” Yergin said on Tuesday.

Yergin anticipated that there might be “one big boost” that would drive prices to $121 per barrel, adding to the stresses caused by underinvestment in oil and gas. As a result, it would be close to the record highs seen in March, just after Russia invaded Ukraine.

However, Yergin said that in a recession, prices may drop to roughly $70 per barrel.