New Report Predicts Elevated Crude Oil Prices in the Near Term

SEATTLE (Oil Monster): The latest report released by ICICI Bank Global Markets foresees higher crude oil prices in the near term, mainly driven by rising geopolitical tensions. The prices have been witnessing steady surge since the start of 2024.

The Brent crude oil prices recorded an increase by almost 5% during the initial month of the year, despite oversupply in physical markets. The ongoing tensions in the Middle East region have lifted the crude oil prices to levels of $80 per barrel.

Although the Israel conflict is likely to prevail, the U.S. attack on Iranian proxies in response to suicide drone strike in Jordan is more likely to emerge as a major driver of the forecast price surge.

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The continued attacks on shipping vessels by Houthi militants in the Red Sea may lead to further supply disruptions in the region, the report noted. Until now, the supply disruptions have not had a huge impact on crude oil prices.

However, potential risks of supply disruptions through the Strait of Hormuz or the Suez Canal and involvement of oil majors in the conflict could send crude oil prices to new highs.

The likelihood of these remains low, ICICI Bank Global Markets said.

The report predicts pickup in global crude oil demand by 1.1 mbpd in 2024, compared with 1.9 mbpd during the prior year. The emerging markets, led by China and India will drive the demand growth. The U.S. demand is expected to see marginal rise, while the European demand is likely to remain flat.