Oil could hit $150 per barrel within the next couple of months if the fighting in the Middle East continues, as inventories are now at very low levels, said Claudio Galimberti, chief economist at Rystad Energy. “At this point, unless we solve [the Middle East conflict], unless we start to see an increase in the flow, then we are going to see lower and lower inventories, which means higher and higher prices,” Galimberti said. Brent crude was sitting around $94 a barrel on Tuesday. Galimberti reckons that the global oil crunch may be solved by raising the number of barrels flowing through the Strait of Hormuz to 10 million a day from two million. “If we manage to go through from two to 10, and that is possible in our view, over the next three to six months, then we will have solved the [oil crunch] crisis,” he said. ‘”The problem, sitting right here, right now, we are absolutely not there.” he added. That said, even if the oil crunch crisis is solved, there may be a shift to a huge oil oversupply due to the unwinding done by OPEC, given that the UAE has left the cartel, said Galimberti. This “is a year of absolute deficit, but fast forward, 2027 may turn out to be a year of humongous surplus,” he said, adding that this is another factor that could create a lot of confusion in the market. Recent oil prices and other asset classes have been hit by volatility caused by the Middle East conflict, as investors grapple with mixed signals in the Iran-U.S. negotiations amid a fragile ceasefire. It has been slightly over 100 days since the Middle East war began.
