Crude oil prices were on a roller coaster ride in 2022, going north of $130/barrel in March amid geopolitical escalation in Europe. Today, WTI is trading at around $80 while Brent International is hovering above $83/barrel.

A slowing worldwide economy, China's recent lockdowns, and a stronger dollar have brought the price of oil down more than 23% in the last six months.

OPEC’s production for December 2022 rose by 150,000 bpd MoM, with Nigeria being instrumental in this increase. In October, Nigerian authorities discovered an illegal underwater 2.5-mile connection from Nigeria’s Forcados export terminal. It had been operating undetected for around nine years, state-run oil company NNPC said at the time. Thus, OPEC’s crude oil production increased in December, but the cartel is still significantly shy of its production targets for the month.

Meanwhile, Russia’s maritime crude oil exports plunged in the last 4 weeks of 2022 to the lowest level of the year as shipments to Europe all but dried out following the EU embargo, declining flows to Asia due to bad weather, and what appears to be a shortage of tankers to carry Russian crude on longer voyages. Russia’s overall crude oil exports by sea dropped by 117,000 barrels per day on a 4-week average basis to 2.615 million bpd for the final four weeks of 2022.

According to the freshly published commodity report by Swiss UBS, crude oil prices are expected to rise in 2023 to at least $110/bbl. With China reopening, oil demand should be higher than 2019 levels. Emerging Asia, including India, should also contribute to growing oil demand in 2023. Meanwhile, Russian oil production should fall in 2023 due to the European Union's embargo (to come into force on 5 February). While production outside the OPEC+ group, which is primarily driven by the U.S., will likely grow again in 2023, the increase should only be modest following years of underinvestment in building new supply.