Oil Associates President Andy Lipow argued that inflation has not yet peaked. The higher oil prices are following the European Union’s decision to ban the overwhelming majority of Russian imports.
Lipow made the arguments on “Mornings with Maria” on Tuesday morning as oil prices traded higher with Brent crude futures for July rising about 1.6% to $123 a barrel and U.S. West Texas Intermediate crude futures for July delivery gaining about 3% to around $118 a barrel.
The higher oil prices come after EU leaders agreed the day before to cut around 90% of all Russian oil imports over the next six months. Europe relies on Russia for 25% of its oil and 40% of its natural gas.
“What this means is higher oil prices are ahead because this impacts about 2.3 million barrels a day of crude oil and another 1.2 million barrels a day of refined products,” Lipow told host Maria Bartiromo.
“And as the world scrambles for alternative supplies, it means that oil prices have to go up in order to create additional demand destruction to get us back in balance.”