What to expect from oil prices in 2023
Oil in 2023, Stears

Supply shocks dominated global commodity markets in 2022, and we saw the dark side of globalisation. 

The oil market, already prone to volatility, left energy analysts stumped on what would happen next. Oil geopolitics have never been tenser, and the battle lines were drawn in 2022.

Key takeaways

  1. 2022 was an eventful year for the global oil market, mostly due to Russia’s invasion of Ukraine amidst tight oil supplies, with bullish investors smiling to the bank.

  2. We expect that events that started in 2022 will continue to influence oil prices in 2023. Events such as the price cap and EU ban on Russian oil, China lifting lockdown restrictions and a possible recession.

  3. Ultimately, Nigeria is a price taker in the global oil market. Our production levels and the petrol subsidy will determine our ability to benefit from high prices.


Russia’s invasion of Ukraine was the most significant catalyst, making oil supplies tighter in Q1 2022 and causing the highest oil prices in a decade. 

The effects ricocheted across the globe and led to more volatility in both demand and supply.

On the demand side, European countries were forced to wean themselves off Russian oil and gas, causing more friction in global demand. For instance, Europe was so desperate that representatives from the EU Commission’s energy department visited Nigeria on a gas-supply-finding mission. Pictures were taken, and hands were shaken, but Nigeria was too busy fighting theft and vandalism demons in 2022 to ramp up gas supplies. China and India, two countries with the largest oil demand in the world, seized the opportunity to buy Russia’s controversial oil at discounted prices. However, China was stuck in lockdown in 2022, meaning there’s a real chance demand could rise in 2023.

But, the real drama happened on the supply side.

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Noelle Okwedy

Noelle Okwedy

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