Executive Summary
Oil prices rose through the quarter as increased demand was met with continued producer restraint. West Texas Intermediate (WTI) front-month futures began the quarter at $75/bbl and settled just over $100/bbl to close the quarter, after peaking March 8th at $124/bbl. The climbing prices come as geopolitics became front and center with Russia launching its invasion of Ukraine. Western nations enacted a series of economic sanctions against Russia. While the sanctions generally included carve-outs for energy exports, issues with financing and insurance, as well as the exit of Western oil and gas companies and oilfield service providers from Russia, have resulted in a substantial decline in Russian oil exports. Russia was the third-largest producer of petroleum and other liquids in 2020, behind the U.S. and just shy of Saudi Arabia, according to data from the U.S. Energy Information Administration (EIA). Prices swung dramatically throughout March based on the progress of peace talks, among other new developments pertaining to the conflict; the high price volatility is the direct reaction from global markets weighing the potential that much Russian oil may no longer be available.
