Oil prices could hit $150 per barrel if hostilities between the United States and Iran escalate further from the current, most testing period in the ceasefire, according to intelligence firm Rystad Energy.<\/p>\n
Renewed hostilities would further deepen the supply shut-ins in the Middle East as the war risk and the near-closed Strait of Hormuz continue to pressure upstream production, the Norway-based energy research company said.<\/p>\n
\u201cAt this stage, it is too early to say whether the current escalation marks a full resumption of hostilities or a dangerous but still containable episode,\u201d Jorge Leon, senior vice president and head of geopolitical analysis at Rystad Energy, said, as carried by Business Standard<\/a>.<\/p>\n Early on Thursday, oil prices spiked in Asian trade as the U.S. carried out strikes in Iran, while Tehran declared<\/a> the Strait of Hormuz is closed again.<\/p>\n The latest escalation\u00a0started<\/a>\u00a0with the downing of a U.S. Apache helicopter near the Strait of Hormuz on Tuesday, with the U.S. responding by hitting targets in Iran. U.S. Central Command also\u00a0disabled<\/a>\u00a0a tanker in the Gulf of Oman as it tried to break the U.S. blockade of the Strait and failed to comply with orders from U.S. forces.<\/p>\n The current escalation is seen as the most serious test of the fragile ceasefire that has been in place since early April.<\/p>\n Meanwhile, traffic through Hormuz has been rising with vessels switching off transponders and transiting dark-mode, further complicating the oil market\u2019s ability to track how much supply is actually flowing through the chokepoint now. Some estimates point to 2 million barrels per day (bpd) moving through Hormuz daily, but this is still one-tenth of the oil transiting the Strait before the war.<\/p>\n Even top executives at major oil companies have started to warn of $150 oil as inventories that have helped offset part of the massive supply loss so far are nearing rock-bottom levels.<\/p>\n \u201cWe’re approaching unheard of inventory levels. I mean, really, really low levels,\u201d Neil Chapman, Exxon\u2019s Senior Vice President,\u00a0said<\/a>\u00a0at the Bernstein 42nd Annual Strategic Decisions Conference at the end of May.<\/p>\n \u201cI think dated Brent, most people with a model would say dated Brent will shoot up once you get to that really low inventory level, up to $150, $160 \u2014 the models would tell you that.\u201d<\/p>\n By Tsvetana Paraskova for Oilprice.com<\/p>\n