**Oil Prices May Surge $20 Per Barrel Amid Rising Tensions Between Israel and Iran**
As tensions escalate between Israel and Iran, the global oil market is bracing for a potential shock. According to Goldman Sachs, if Israeli retaliation leads to a significant disruption in Iranian oil production, oil prices could skyrocket by $20 per barrel. This scenario assumes that OPEC+ does not respond by increasing production to offset the losses.
Daan Struyven, co-head of global commodities research at Goldman Sachs, estimates that a sustained 1 million barrels per day drop in Iranian production could lead to a peak boost in oil prices next year. However, if key OPEC+ members like Saudi Arabia and the UAE step in to fill the gap, the price increase could be limited to around $10 per barrel.
The recent missile attack by Iran on Israel has raised concerns about the stability of the region and the potential impact on global oil supplies. Iran, a major player in the global oil market, produces nearly 4 million barrels of oil per day, accounting for around 4% of the world’s supply.
Industry analysts warn that Iran’s oil infrastructure, including the critical Kharg Island, which handles 90% of the country’s crude exports, could become a target for Israel. This could lead to supply disruptions in the Strait of Hormuz, a vital waterway through which approximately one-fifth of the world’s daily oil production passes.
The risks of a wider conflict are escalating, and oil prices have already seen a significant surge, with U.S. crude futures rising around 5% on Thursday and ticking higher again on Friday morning. While the probability of a full-scale war remains relatively low, the potential consequences for the global oil market are dire. In the event of a full-scale war, oil prices could soar above $100 per barrel, with some analysts predicting prices as high as $150 per barrel or more.
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