Oil price spikes to $90-$100 per barrel are “within reach” as the United States and Iran appear close to war, Fereidun Fesharaki, Chairman Emeritus at energy market consultancy FGE NexantECA, told Bloomberg Television on Monday.
“I don’t think the US has a choice but to go to war,” Fesharaki told Bloomberg, adding that he expects something to happen as soon as this coming weekend.
The U.S. and Iran are preparing for last-ditch indirect talks on Thursday in Geneva, according to the Omani mediators.
So far, no breakthrough has been reached in the talks. U.S. President Donald Trump last week gave Iran 10-15 days to agree to ditch its nuclear program.
“It is very hard for me to see a scenario that they would just avoid this, and turn the ships around and go home,” Fesharaki told Bloomberg TV.
“If the Iranians accept what the US says, there is no legitimacy left to the regime anymore; they have to say ‘no’,” the expert added, noting that the talks later this week are bound to fail.
This time around, the oil market may be underestimating the potential consequences as Iran could hit production facilities in Saudi Arabia, the UAE, and Kuwait, or try to block the Strait of Hormuz, according to Fesharaki.
Oil prices of $90 to $100 a barrel are “within reach,” if supply from the Middle East is indeed disrupted, he added.
The massive U.S. military buildups near the Middle East suggest that “The US military is ready for a sustained, highly kinetic campaign should President Trump order it, and also prepared to defend allies and partners in the Middle East from Iran’s missiles,” Dana Stroul, a former senior Pentagon official, told Fox News Digital on Sunday.
President Trump could consider an initial targeted attack on Iran, but if that fails to persuade Tehran to give up its nuclear enrichment program, the U.S. President could consider a larger campaign in the coming months to oust the current Iranian leadership, the New York Times reported on Sunday, citing sources briefed on internal deliberations in the U.S. Administration.
By Tsvetana Paraskova for Oilprice.com
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