Oil prices could rise above USD 90 per barrel if fighting in the Middle East disrupts shipping through the Strait of Hormuz, Investing.com reported, citing analysts at UBS.
Benchmark Brent Crude was trading near USD 88.85 a barrel on Friday, up about 4%, while West Texas Intermediate climbed 5.3% to USD 85.31, as traders weighed the risk that the Iran conflict could disrupt the shipping of oil through the Strait of Hormuz, a critical waterway through which roughly 20% of the world’s oil supply moves.
UBS analysts said current price levels are unlikely to represent a “stable equilibrium,” warning that prolonged shipping disruptions or damage to energy infrastructure could push crude prices higher.
The US government has sought to ease supply concerns by allowing Russian oil sales to India for 30 days and considering measures to stabilize energy markets, according to reports.
UBS said that if hostilities ease, prices could eventually retreat, with Brent crude potentially returning to the USD 60-70 per barrel range.
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