Daniel Yergin, S&P Global Vice President, emphasized that with the EU raising sanctions, Putin can use oil as a weapon and the oil market may tighten even more. The oil market could face severe supply problems as the European Union tightens sanctions on Russia, according to energy historian Daniel Yergin.
“Vladimir Putin used natural gas as a weapon,” said Yergin, “Can he use oil as a weapon? It may be in his interest to restrict supply and see prices go up. “You don’t need to cut too much to create panic in the oil market,” he said.
The oil market has tightened since Russia invaded Ukraine in February and the West imposed new sanctions on Moscow. Russian President Vladimir Putin responded to this move by cutting off the flow of natural gas to Europe.
However, Putin also criticized the EU’s plan to ban imports of Russian crude oil by sea from December 5 and refined products from February. The Russian President has said he will not sell to any country that supports the G-7 proposal to limit the prices of Russian oil. Oil prices fell from a 14-year high in March as inflation rose and central banks slowed the global economy. Still, Brent futures are still trading at $94, 20 percent higher than earlier this year. Yergin, S&P Global Vice President, said: “We haven’t had a turmoil in the oil market since the 1970s. We can live that these days. There are too many countries on the edge of the abyss,” he said.
