Oil could hit US$150 amid Gulf shutdown, Wood Mackenzie says

War in Iran is currently cutting Gulf oil and oil products supply to the market by some 15 million barrels per day (bpd) which could raise crude prices to US$150 (HK$1,173) per barrel, research and consultancy firm Wood Mackenzie said on Tuesday.

Iran’s Revolutionary Guards have vowed not to let any oil out of the Middle East until US and Israeli attacks cease.

WoodMac said:

• “Gulf countries in total produce 20 million bpd of liquids, and 15 million bpd of exports have been taken out of the global market”

• “Global oil demand of 105 million bpd will still have to fall to balance the market and in our view, that will require Brent to push up at least to US$150 per barrel in the coming weeks”

• “In our view, US$200 per barrel is not outside the realms of possibility in 2026”

• Europe faces particularly acute challenges, with Gulf refineries supplying 60 percent of its jet fuel and 30 percent of its diesel

• “Much will depend on how long the war lasts, how long the Strait of Hormuz remains closed, and if the US Navy can ensure safe passage of vessels by escorting shipping”

• Even after the conflict ends, ramping up supply will not be swift

Reuters