Oil prices near $95 amid US-Iran war concerns
What's the story
Oil prices remained stable on Friday, but are on track for a second consecutive weekly gain. The ongoing deadlock in the US-Iran war continues to disrupt oil supplies from the key Middle East producing region. Brent crude futures rose by four cents to $93.82 per barrel after gaining over 2% in the previous session. Meanwhile, US West Texas Intermediate (WTI) crude futures fell by six cents to $86.78 per barrel following a 2.3% rise in the prior session.
Price increase
War disrupts global oil and gas flows
The US-Iran war, which began on February 28 with military strikes by the US and Israel against Iran, has led to a blockade of the Strait of Hormuz and Iranian attacks on energy facilities across the Middle East. This has disrupted global oil and gas flows.
Shipping traffic through the Strait of Hormuz remains restricted, with just nine vessels transiting the waterway, well below pre-war levels.
Market forecast
Analysts warn of potential price hikes
JPMorgan estimates that each additional month of disruption could add $7-8 per barrel to Brent prices. If the disruption lasts for three months, average monthly Brent prices could reach around $114 per barrel.
Goldman Sachs has also warned that if shipping disruptions through the Strait of Hormuz persist, Brent could rise to $120 per barrel.
However, they expect Middle East tensions will ease under their base case with an average price of $80 in Q4 and $75 next year.