Oil Prices Can Hit Triple Digits If Middle East Conflict Drags On – Rystad Energy

KUALA LUMPUR, March 5 (Bernama) -- Oil prices can surge to triple-digit levels if the conflict in the Middle East drags on, according to global energy research firm Rystad Energy.

Head of Middle East and North Africa (MENA) Research at Rystad Energy, Aditya Saraswat, said markets are extremely ​​​​volatile as traders react to the latest escalation in tensions in the Middle East.

“If the conflict drags on, triple-digit oil prices become a very real possibility,” he said in a market update today.

Saraswat said earlier concerns had centred on whether energy supplies could move through the region; however, the latest drone strikes have significantly raised the risk to energy infrastructure across the Middle East.

He noted that the effects of the escalation are already spilling over into multiple sectors, ranging from data centres to consumers who will ultimately feel the impact through higher fuel prices.

He said that if the conflict persists, precautionary shutdowns across the region might begin to emerge, which would have serious implications for global oil markets.

“If disruptions start in Iraq, the risk is that they spread to other key producers such as Kuwait, Saudi Arabia, the United Arab Emirates (UAE) and Qatar,” he said.

On the gas front, Saraswat said disruptions are already materialising, with Qatar having taken about 77 million tonnes per year of liquefied natural gas (LNG) capacity offline.

“If the situation escalates further, there is a risk that the UAE could face similar disruptions,” he added.

At the time of writing, Brent crude jumped 2.84 per cent to US$83.71 per barrel.

-- BERNAMA