According to the latest forecast from Bank of America (BofA,) the global energy crisis is far from over and its economic impact could be much worse than we think.

The BofA’s most recent note stated that the price of Brent crude, the leading industrial benchmark, could surge to an all-time high of $110 per barrel in 2023. It may surge even higher given some risks that could put additional pressure on oil pricing, including the possibility of placing a price cap on imports of Russian crude.

This year alone, the price of Brent crude has been pegged at an average of $101 per barrel, and it is unlikely that prices will go much lower next year. According to BofA analysts, the standard may hit $100, then surge to $110 as the driving season peaks. It is also expected that the price of Brent crude will be relatively lower during the first three months of the new year.

Russia is the Biggest Risk in the Equation

However, analysts note that several wildcards could come into play next year – and putting a cap on the price of Russian crude could be the biggest of them all.

As of Friday, December 2, the relevant officials of the European Union decided to put a cap on the price of Russian crude, setting it at $60 a barrel. The said cap will take effect on Monday, December 5, with a total ban on Russian oil imports into EU member countries and related services for cargo elsewhere.

According to the BofA note, the Bank has embedded Russia’s total oil production levels of ten million barrels a day in its 2023 forecast in contrast to the International Energy Agency (IEA)’s forecast of 9.59 million barrels a day. However, the Bank also warned that any substantial downward changes from the figures could drive higher crude prices.

Not the Only Risk

On the other hand, Russia announced that it refused to sell oil to countries implementing the EU price cap. As a result, analysts added that the country’s oil exports could drop at a rate of around a million barrels a day.

But while Russia is seen as the most significant risk to oil prices, other factors may come into play. For example, supply disruptions from OPEC member countries in the Middle East and Africa may also bring tension to the global petroleum market.