In the coming months, oil markets will face a number of global risks that could push oil prices to about $ 120 a barrel and keep them at that level, said an expert from Energy Aspects Livia Gallarati.

Among the most short-term risks are European Union sanctions from Dec. 5, which would ban imports of Russian crude by sea. A sharp drop in supplies from Europe's largest energy supplier is likely to cause oil prices to spike, Gallarati said, and prices will face new pressure in February when the next EU sanctions on petroleum products such as diesel take effect.

Europe will have to cut itself off from a longtime source that's only days away and rely on more distant suppliers, such as the U.S. and the Middle East, Gallarati said.

In addition, Russia's crude oil production is already 500,000 barrels a day lower and could drop another 1.5 million barrels a day early next year as the fuel ban forces Russian refineries to cut production.

Losing that high volume from Russia for an extended period of time would be a huge blow to global oil supplies, and Gallarati said that poses the biggest risk to markets.

At the same time, subsidies and tax breaks from Western governments designed to help people pay their bills would further spur demand and keep supply from catching up. Market prices will skyrocket, and eventually someone will have to pay the bills, Gallarati warned.

In addition to Europe's sanctions on Russia, China's reopening plans and the U.S. response to OPEC+ decisions could either hold oil prices down or boost them sharply in 2023. China's zero COVID-19 policy helped Europe because there was less competition for energy supplies from Russia as well as supplies from other countries.

But if suppressed demand in the world's second-largest economy suddenly comes back into force, prices could rise and global supplies could face additional hurdles, particularly affecting Europe, Gallarati said.

Meanwhile, the world's other major oil producers, OPEC+ and the U.S., could add to the uncertainty in the markets. The oil cartel has cut its production quota, raising oil prices, and the U.S. is releasing oil from the Strategic Petroleum Reserve to lower them.