Oil prices rose for a second straight day on Tuesday as concerns over Middle East supply disruptions intensified, with analysts warning that Brent crude could reach $120-$150 a barrel if disruptions persist.
Iman Nasseri, senior vice president for Middle East and Asia at FGE, said the loss of another 2 million to 4 million barrels per day of supply could significantly tighten the market.
Physical crude is already trading at $120-$130 a barrel, while prompt cargoes carry premiums of $20-$30, he said.
The Saudi East-West pipeline remains offline as a precautionary measure. Nasseri said the market is currently pricing in a two-to-three-week disruption, with storage at Yanbu potentially supporting crude loading for 15 to 25 days.
If the pipeline remains shut for more than two weeks, Brent futures could converge with physical crude prices.
Supply risks have widened as shipping through the Strait of Hormuz faces attacks and some oil fields remain shut. Jonathan Barratt of ETO Markets said crude could reach $125-$130, calling such levels “very, very possible”.
Brent futures rose $1.24, or 1.18%, to $106.93 a barrel, while US WTI gained $1.29, or 1.24%, to $102.65. Analysts said prices are likely to remain volatile while the US-Iran conflict continues, with supply disruptions remaining the key market driver.
