A fresh report from Rystad Energy has raised alarms that oil prices could spike to $150 per barrel if the ongoing hostilities between the United States and Iran intensify further. The Oslo-based consultancy highlighted that tensions in the Gulf region have already disrupted supply flows, pushing crude benchmarks higher and putting pressure on global financial markets, particularly US equities.
Escalation Threatens Fragile Ceasefire
The report notes that the latest escalation has pushed the April ceasefire into its most vulnerable phase. Brent crude briefly surged to around $94.5 per barrel before retreating to $93, reflecting increased volatility and uncertainty over the conflict's trajectory.
Jorge Leon, senior vice president and head of geopolitical analysis at Rystad Energy, stated, "At this stage, it is too early to say whether the current escalation marks a full resumption of hostilities or a dangerous but still containable episode." He added that the likelihood of a short-term agreement has decreased from an estimated 40 percent a few weeks ago.
Mitigating Factors
Leon noted that record releases from the Strategic Petroleum Reserve, decreased imports from China, and ongoing crude flows bypassing the Strait of Hormuz via Saudi Arabia’s Yanbu port could help mitigate the immediate effects of the supply disruption. However, he warned that the next few days will be crucial in determining whether diplomacy can reestablish itself or if the situation enters a prolonged cycle of escalation.
Massive Supply Disruption
The report highlights a disruption of approximately 11.8 million barrels per day of production across six Gulf companies, describing it as one of the worst supply shocks in the modern oil age. Almost one billion barrels of total oil supplies have been removed from international markets over the last three months, raising concerns about prolonged volatility until a more definitive geopolitical solution is established.
