We forecast Brent crude to average US$ 85/barrel in 2022 and touch US$ 100/barrel mid-year

Multinationals should begin factoring higher oil prices into their business planning and strategic assumptions. Although high oil prices will be a boon to industrial firms serving the oil sector and for firms operating in major oil-producing countries, the impact on most companies will be in the form of higher input costs.

Quarterly average oil prices 2021, and 2022 forecasts


After plummeting in the early weeks of the pandemic, oil prices have been on a tear since late 2020. The spot price for Brent crude has nearly doubled from an average US$ 45/barrel in Q4 2020 to US$ 88/barrel on January 25, 2022—the highest since October 2014.

The discovery of the Omicron variant and its rapid spread around the world caused oil prices to slump in Q4, but that trend has since reversed, as the worst fears about the impact on global growth and oil demand have faded.

In light of recent trends, rapidly rising demand and evidence of constrained production, FrontierView is revising up its 2022 oil price forecast to US$ 85/barrel, from US$ 80 previously. Uncertain oil market dynamics, particularly around geopolitical and supply risks, will contribute to high volatility throughout the year. It is likely that Brent crude prices will reach as high as US$ 100/barrel in mid-2022 before prices begin easing in Q3.

Our View

Several factors support our assumption that oil prices will increase through H2 2022.

First, the Omicron variant’s spread across a number of economies has shown a limited impact on domestic consumer mobility. Although global travel has taken a hit, the drop is likely to be short-lived, and as global travel volumes continue to increase in the next two quarters, growing jet fuel demand will exert upward pressure on oil prices. Second, global manufacturing activity is still exceptionally strong and shows no substantial sign of easing in the short term—another plus for oil demand. Third, broader tightness in global energy and commodity markets, e.g., rising coal prices, low natural gas inventories in Europe, and high grain prices, signal and support higher oil prices in the medium term.

As demand for oil is expected to grow steadily in H2 2022, oil supply shows signs of struggling to keep pace. Despite plans to increase its production targets by 400,000 barrels per day (bpd), OPEC+ has fallen short in each of the last three months, suggesting ongoing production challenges for certain producers. Meanwhile, the US faces continued obstacles to raising output, with crude oil production still at 11.56 million (bpd), 10% below pre-pandemic levels, even while global oil consumption has already exceeded its pre-pandemic level. By H2 2022, we expect that high oil prices will have driven enough expansion in global production capacity to begin exerting downward pressure on oil prices. Until then, supplies will be tight, particularly in the second quarter.

At FrontierView, our mission is to help our clients grow and win in their most important markets. We are excited to share that FiscalNote, a leading technology provider of global policy and market intelligence has acquired FrontierView. We will continue to cover issues and topics driving growth in your business, while fully leveraging FiscalNote’s portfolio within the global risk, ESG, and geopolitical advisory product suite.

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