RBC Capital Markets has stated that the conflict between the United States and Iran has entered a more dangerous phase, marked by successive attacks on oil tankers in the Red Sea and Iranian strikes on critical infrastructure in the Persian Gulf.
Helima Croft, the global head of commodity strategy at the firm, noted in a client report on Wednesday that the sustained geopolitical risk in the Middle East could push Brent crude oil prices above $128 per barrel.
"We believe the conflict is dangerously escalating and maintain our view that oil prices will likely break above the $128/bbl high set during the 2022 Russia-Ukraine conflict," Croft said. "In the most extreme worst-case scenario of a full-scale Middle Eastern war, prices could even challenge the all-time record of $146/bbl seen in 2008."
The analyst added that Ukraine is simultaneously intensifying its attacks on Russian oil and petroleum product supply chains. This month, Ukraine has struck over 150 tankers in the Black and Azov Seas. The consecutive attacks have forced the Caspian Pipeline Consortium to suspend loading operations at its Black Sea crude terminal.
According to RBC data, approximately 80% of Kazakhstan's crude oil is exported via this pipeline.
"The duration of the pipeline shutdown is currently uncertain, and Kazakhstan has very limited alternative export routes, making it difficult to fully compensate for the capacity loss of the Caspian pipeline," Croft pointed out. "This means the country's crude output, which was 1.7 million barrels per day in June, faces the risk of forced production cuts."
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