Global crude oil prices could rise to $120 per barrel in the short term and potentially reach $150 per barrel if war extends over a month and geopolitical tensions continue in West Asia, Kayanat Chainwala, assistant vice president, Kotak Securities, told ANI on Saturday.
"Near-term crude prices are likely to move in the $85-120 range for WTI and $90-125 for Brent. If the conflict escalates and supply disruptions persist for several weeks, prices could rise even further, possibly approaching $150 per barrel. But in the short term, $120 is more likely," Chainwala said, emphasising the role of supply disruptions in pushing crude markets higher.
She explained that the ongoing turbulence in the Strait of Hormuz and the state of Hormuz situation has already caused losses of approximately 10-12 million barrels per day.
"This is a significant disruption, not a perceived risk. Earlier this year, the market was facing a glut of 4-5 million barrels per day, but the current losses are offsetting that surplus and pushing the market toward a deficit," she said.
Chainwala added that emergency reserves, including the International Energy Agency's 400-million-barrel release, would only cover about 20 days of lost supply, which would be insufficient if the disruption continues for an extended period.
"Any prolonged disruption through this trade will be bullish for crude oil and negative for other commodities, as it ignites inflation concerns and could delay interest rate cuts," he noted. -- ANI
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