Oil prices could hit $150 a barrel or more with demand destruction likely by the end of the year, says global commodities trader Trafigura

• Oil prices could reach $150 a barrel this year, Trafigura's CEO said Tuesday.
• "If we see very high energy prices for a period of time we will eventually see demand destruction," said Jeremy Weir.

Oil prices could reach $150 per barrel in the coming months, and the market could begin to see demand destruction by year's end, Trafigura CEO Jeremy Weir said Tuesday.

The head of the global commodities trading firm warned rising commodity prices will likely drag on economic activity, eventually cooling demand.

"If we see very high energy prices for a period of time we will eventually see demand destruction," he said at the FT Global Boardroom conference. "It will be problematic to sustain these levels and continue global growth."

US crude prices climbed 1.4% to $120.14 a barrel, and Brent crude rose 1.4% to $121.18. China is expected to add to price pressures as the country continues easing COVID-19 lockdown restrictions.

Oil prices reached their highest level since 2008 this past March following Russia's invasion of Ukraine. The war in Europe has upended global energy markets and pushed prices higher as Europe tries to wean off of Russian energy.

The EU and US have taken aim at Russian oil with steep sanctions. But Russia has been offloading their supply elsewhere at steep discounts to blunt some of the effects of the penalties.

Weir added that Trafigura has largely cut out Russia from its business dealings, telling the FT that Russian supply only accounted for about 6% of its business before the war and that "it's dropped by that amount." Trafigura changed its export rules following the invasion to only meet European energy needs.