Crude oil prices were set to end the week lower than they started it as Israel and Iran stopped bombing each other, alleviating fears of a supply disruption in the Middle East.
“[W]hile Iran has not yet targeted the route, even a limited disruption would severely impact global supply,” Oxford Economics analysts said in a June 20 client note. “In a worst-case scenario, prices could spike to $130 per barrel and shave 0.8 percentage points off global GDP.”
That’s what Bjarne Schieldrop, Chief Commodities Analyst at Skandinaviska Enskilda Banken AB (SEB), said in an oil report sent to Rigzone by the SEB team on Monday. In the report, Schieldrop highlighted that Brent crossed the $80 per barrel line this morning but noted that it “quickly fell back, assigning limited probability for Iran choosing to close the Strait of Hormuz”.
White House Press Secretary Karoline Leavitt read a statement from President Trump saying he’s weighing his options based on the potential for diplomacy with Tehran. The President’s position amounts to maybe peace, maybe war, maybe nothing. In the meantime, Israel has already escalated, bombing Iranian nuclear sites Thursday, and Iran has fired back with drones and missiles following a deadly strike on an Israeli.
Geopolitics could move Brent crude higher by around $10 per barrel, Goldman Sachs has estimated, from a starting point in the mid-$70s. However, the bank admitted oil could top $90 in case of Iranian supply disruption.
Crude oil prices continued higher today as the war between Israel and Iran continued unabated, fuelling worry that oil supply from the biggest exporting region may be under threat of disruption.
Oil prices continued to rise on Tuesday afternoon, following a dip in Monday’s trading session. Today’s oil price action follows Friday’s biggest intraday surge in three years following the Israeli strikes on Iran.
The market’s worst fear—a major supply disruption in the Middle East—hasn’t materialized yet. And it may not, as was the case in the previous Israel-Iran flare-ups in recent years.
Oil prices are likely to remain capped below $80 per barrel despite the escalating Israel-Iran conflict, research firm Rystad Energy said on Monday, as Iran and Israel continue to trade strikes with the escalation now in its fourth day.
Oil jumped and stocks slid after Israel attacked Iran’s nuclear program facilities and killed senior military commanders in a significant escalation of tensions in the Middle East.
World oil demand rose by 990,000 barrels per day in the first quarter of 2025, but the remainder of the year will see demand growth at just 650,000 bpd, the International Energy Agency said in its latest monthly report on oil, citing record sales of electric cars and weaker economic growth globally. As a result, the IEA put its full-2025 oil demand growth forecast at 740,000 barrels daily.