Economists predict oil price will remain high

The European Union decision not to buy Russian oil will sharpen geopolitical relations in those markets, so in the face of this new situation The economists Miguel Collado Di Franco and Antonio Ciriaco Cruz agree that the price of crude oil will remain high in 2023. However, they explain different opinions about its impact on the Dominican economy.

For the economist and executive vice president of the Regional Center for Economic Strategies (CREES), Miguel Collado DiFranco, this EU measure will not have major impactsbecause Russia will continue to sell its oil to China, India and other countries and the margin for Russia will remain high.

Di Franco explains that the limit on the price is fixed at a time when the price of Ural oil is lower than the price, “chap”, imposed as a limit so that third countries can buy it and be transported by sea with due insurance.

Russia will react with protests, but will continue to do business with its oil. It would be other factors, such as the opening of China, that could further increase the price of crude oil, which should remain high in 2023. In addition, he affirms that there are risks in natural gas, diesel and the price of coal. Energy raw materials will have high prices in 2023, he points out.

“The measure is another element that demonstrates, yes, the lack of interest on the part of Western countries in establishing a negotiation to stop the conflict. As long as this happens and the production that is stopping flowing from Ukraine is not adjusted, the impact of the “commodities” affected since the conflict will continue,” he said.

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Russia’s conflict with Ukraine is going to “tighten” the price of oil, the fuel market, natural gas and other raw materials and that will affect the Dominican economy, since 75% of the energy material of the Dominican Republic is made up of oil and natural gas, in the opinion of the Vice Dean of Economics of the UASD, Antonio Ciriaco Cruz.

Remember that Russia has a strong world weight in oil and natural gas. “Clearly this can unleash in the Dominican Republic a process of reversal of the inflation levels that had been subsiding in recent months.”. He argued that the reduction in inflation may not be due to the restrictive monetary policy, but to the fact that oil prices have been falling, due to the fact that the Russian conflict has calmed down a bit.

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