Crude oil prices today are set to rise strongly again in the first half of 2023 amid a significant increase in tensions in oil markets, with the European Union’s embargo on Russian oil a crucial factor, Commerzbank (ETR:CBKG) said in a report.

Russia accounted for about 11% of all EU oil imports in November and now needs to buy it from other countries. The imposition of a price ceiling on Russian oil is another factor, and Russia has warned that it will stop supplying countries that agree to these restrictions, the bank’s analysts said.

Will crude oil prices rise tomorrow?

The International Energy Agency (IEA) expects Russia to reduce oil production by about 1.8 million barrels per day by the end of the first quarter of 2023 compared to prewar levels. According to Commerzbank, until recently, Russia had little or no need to reduce production because the decline in oil exports to the EU was offset by an increase in supplies to China, India and Turkey.

Commerzbank experts predict that global oil demand at the end of 2023 will be 2.5 million bpd higher than currently. This means that demand will again exceed supply from the middle of the year, while already low inventories will continue to decline.

They believe the current price weakness is short-lived and there will be a significant recovery in the coming months, with Brent contract prices rising back to $95 per barrel by mid-2023.

Earlier, we reported that OPEC countries have made almost no changes to non-OPEC oil supplies in 2022 and 2023.