Oil prices could soar to $150 per barrel or more if the Middle East war continues until the end of March, Kpler says, as the conflict escalates with Iran intensifying attacks on energy infrastructure in the region.
“With this huge outage of supply it is just a matter of time where prices really catch up with the fundamentals here and we just see how bad things are,” Amena Bakr, Kpler’s Head of Middle East and OPEC+ Insights, told CNBC International.
This is a supply shock – not only of oil – that hits the world, Bakr added, noting that despite the war, the OPEC+ alliance is likely to survive as-is, as OPEC did in previous conflicts between some of its members.
Early on Thursday, Brent oil prices soared by 6% to above $114 per barrel as the Iranian attacks on Middle Eastern oil infrastructure continue while the Strait of Hormuz remains closed to vessels other than Iranian cargoes.
Wednesday’s strike on Iran’s huge South Pars gas field has prompted Iran to retaliate by attacking energy infrastructure in Qatar and Saudi Arabia.
Iran hit Qatar’s Ras Laffan industrial complex, the world’s largest liquefied natural gas facility, with QatarEnergy confirming “extensive damage” on the site that has been halted since the beginning of the war.
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Separately, reports emerged that the Samref refinery at Yanbu on Saudi Arabia’s Red Sea coast has also been targeted, with a minor impact.
The Iranian retaliation “raises fears of a more prolonged disruption to Persian Gulf energy supplies,” ING commodities strategists Warren Patterson and Ewa Manthey said on Thursday.
Attacks on energy infrastructure eclipse the efforts of the U.S. Administration to contain the surge in oil prices and, “especially amid retaliation, point to additional upside for prices,” the strategists added.
Analysts have been talking about $200 per barrel oil for more than a week, even before Iran warned of such price amid escalating attacks in the Middle East.
By Tsvetana Paraskova for Oilprice.com
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