Crude oil prices could crash to $65 a barrel by the end of this year and $45 by the end of 2023 if a recession hits the world economy, analysts at Citi said in a report.

The benchmark Brent crude is trading at $101.9 per barrel at present, after shooting up to $128 in early March because of the Ukraine war. It was prevailing at around $97 a barrel before Russia’s invasion of Ukraine.

Rising Covid infections in China coupled with fears of a recession in the US and Europe as central banks takes aggressive rate hike actions to quell inflation have seen its prices softening recently.

Last month, Citigroup forecast that there is a near 50 per cent probability of a global recession because of the rate hikes.

Separately, the chief economist at Nomura — Rob Subbaraman — told CNBC that many of the globe’s leading economies will face recession within the next 12 months.

These include the Eurozone, the UK, Japan, Australia, South Korea and Canada apart from the US.

A Bloomberg report quoting Citi’s analysts said their outlook factors the absence of any intervention by oil cartel Opec and a decline in oil investments.

Contrarian view

Their projections sharply contradict the forecasts JP Morgan analysts who said oil prices could reach a “stratospheric’’ $380 per barrel if sanctions results in Russia resorting to retaliatory crude output cuts.

Though the European nations and the US have cut energy imports from Russia due to the sanctions, India continues to import given the steep discount offered by Moscow.

Private refiners such as Reliance Industries and Rosneft-backed Nayara Energy have brought Russian oil in recent times.

According to the energy quarterly report of Motilal Oswal Financial Services, the world oil demand is projected to average 100.3 million barrels per day (mb/d), which is approximately 0.1 mb/d higher than 2019.

It said in the first quarter of 2022, demand recorded robust growth mainly due to a strong economic rebound, supported by stimulus programmes and a further easing of Covid containment measures amid accelerated vaccination rollouts.

“Crude oil markets were gripped with many factors — recession, demand destruction, supply disruptions and rock bottom spare capacity to name a few. It looks like volatility is here to stay in oil markets for a good period of time.”

“The longer-term outlook for oil also remains bullish as Russia’s production is falling faster than expected and a lot of it may be lost irreversibly.

“The global oil market remains in a structural deficit and would need much higher prices to regain its balance, as Chinese demand is already recovering and on the other hand, Russian oil production could fall another 0.5 million barrels per day,’’ the brokerage observed.

Saudi price hike

Saudi Arabia, the world’s top oil exporter, raised August crude oil prices for Asian buyers to near record levels amid tight supply and robust demand, according to Reuters.

The official selling price for August-loading Arab Light to Asia was raised $2.80 a barrel from July to $9.30 a barrel over Oman/Dubai quotes, state oil producer Saudi Aramco said on Monday, close to the record high premium of $9.35 per barrel hit in May.