Oil prices increased beyond $90 a barrel as producers anticipate a surge in demand that will only grow as the industry readjusts following the COVID-19 pandemic. At the same time, some analysts are already expecting this number to stay high as geopolitical tensions boil around the world.

U.S. and global benchmarks for crude-oil futures reached the $90 mark for the first time in seven years. After initial apprehension about the Omicron variant of COVID-19's impact on global energy demand, producers are continuing to expect it to remain strong as more economies loosen restrictions on everyday life.

Some analysts are predicting the demand for oil will go even higher in 2022.

A reason for this is the lingering damage left by the pandemic on the industry. According to the Dallas Federal Reserve, input costs for oil production rose sharply in the fourth quarter of 2021 for the third time in a row for U.S. firms. Analysts at Morgan Stanley noted last month that a combination of low inventories, investment and production capacity would push oil prices closer to $100 a barrel.

Non-pandemic factors are also fueling expectations that oil demand will remain formidable.

On Feb. 2, the Organization of the Petroleum Exporting Countries (OPEC) and a coalition of other major producers came to an agreement to boost collective oil production by an additional 400,000 barrels a day by March, but doubts remain as to whether or not some producers are capable of meeting this goal.

The ongoing tension between Russia and Ukraine has raised the specter of U.S. sanctions that will strike at the heart of the Russian energy sector. Washington warns that a Russian attack on Ukraine can happen in February at a time of its choosing though it has recently toned down its warnings of an imminent invasion.

The United Arab Emirates, a major oil producer, has come under attack multiple times by missiles from Houthi rebels in Yemen. These attacks, including one that struck near an oil depot outside Abu Dhabi, have increased fears that oil production facilities are at risk.

Iran has remained under U.S. sanctions that have curtailed its ability to increase oil production. Negotiations to restore the Iran nuclear deal are ongoing, but progress is slow and sanctions relief remains elusive.

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