Bank of America says Brent crude oil could top $150 a barrel if Iran war disruptions persist
Analysts at the Bank of America have raised their outlook if Iran war continues to escalate
TL;DR
- A prolonged conflict with Iran could cause Brent crude to surge above $150 a barrel.
- Bank of America raised its oil price outlook for the second half of the year to $95 per barrel.
- Supply disruptions are attributed to U.S.-Iran conflict, Strait of Hormuz and Bab-el-Mandeb issues, refinery outages, and reduced exports from Russia and the Middle East.
- Strategic and commercial inventories are diminishing, with physical crude markets signaling near-term scarcity.
- Organization for Economic Co-operation and Development strategic reserves have fallen substantially.
- Disruptions through Hormuz have impacted millions of barrels per day, and global above-ground oil inventories have decreased significantly.
- The energy disruptions could evolve into a 'structural shock' with very limited spare capacity.