By RT
April 18, 2024
A direct war between Israel and Iran could substantially drive prices up, the bank has said in a note cited by CNBC.
An all-out war between Israel and Iran could drive oil prices up by $30-$40 per barrel, Bank of America experts have told clients in a research note seen by CNBC.
Tehran and West Jerusalem have traded threats since Iran conducted its first direct military attack on the Jewish state last weekend, in retaliation for a suspected Israeli airstrike on the Iranian diplomatic mission in Syria earlier this month.
If hostilities escalate into a protracted conflict that impacts energy infrastructure and disrupts Iranian crude supplies, the price of global benchmark Brent could rise substantially to $130 in the second quarter of this year, a Bank of America research note stated on Tuesday, according to CNBC. It added that US crude oil could soar to $123.
The scenario reportedly assumes that Iranian oil production falls by up to 1.5 million barrels per day (bpd). According to the International Energy Agency (IEA), Iran, a founding member of the Organization of the Petroleum Exporting Countries (OPEC), produces about 3.2m barrels of oil a day. Last year it ranked as the worlds second largest source of supply growth after the US.
If a conflict led to disruptions outside Iran, such as the market losing 2 million bpd or more, prices could spike by $50 a barrel, according to the note. Brent would eventually settle around $100 in 2025, while US benchmark West Texas Intermediate (WTI) would come down to $93, it predicted.
The price of Brent crude spiked to over $91 per barrel earlier this month after Tehran threatened retaliation against Israel. However, as the banks global economics team has pointed out, in the days following the retaliatory strike crude oil prices fell due to [the] limited casualties and damage it caused.
Analysts have warned that the market reaction may not reflect the medium-term economic and geopolitical implications of Irans first-ever direct military attack on Israel.
If a war is limited to the two nations, Bank of America sees little impact on US economic growth and the Federal Reserves monetary policy. A general regional war, however, could have a substantial impact on the US, according to the institution.
Brent futures were trading at $86.6 per barrel at 11:29 GMT on the Intercontinental Exchange (ICE). WTI futures were trading at $82 per barrel in New York.
By LAMAI CASSIUS
April 28, 2024
By The Nigerian Observer
April 28, 2024
By The Nigerian Observer
April 28, 2024
April 28, 2024 at 05:28 PM
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