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Illan believes that if the war in the Middle East escalates and shipping is disrupted, oil prices could reach US$150 per barrel; But as China reduces imports and global inventories run out, the market no longer has the buffer it once had.
Il Allen, chief economic advisor of Allianz Group, said that if the conflict in the Middle East increases further.oil price It could rise to $150 a barrel as the market lacks the two buffers it had in the past.
In a recent interview with Mario Nafwal’s podcast, El-Alon said that if a large-scale war breaks out and tensions in the region and connections interfere,red sea Oil tanker shipping, oil prices will rise sharply, “it will not just be US$120 per barrel, but US$150.”
He pointed out that the reason oil prices did not reach US$150 per barrel in the past was partly because China had cut crude oil imports by 40%, and partly because countries used up large amounts of government and corporate inventories. Nowadays, these stocks are being consumed in large quantities around the world, and the market has lost the buffer space it had in the past.
US strategic oil stockpiles fell to 282.6 million barrels last week, the lowest level since October 1982, US Energy Department data showed.
However, US President Trump said on the 25th that he “will not attack immediately.”iran “, oil prices fell back in response. However, Illalan nevertheless warned that if the conflict continued for a long time, it would become a “major disruption” to the global economy, especially as borrowing costs would remain at high levels.
Illan explained that the recent market stability is based on “borrowed flexibility”, with countries supporting the market by liquidating existing inventories and financing funds. “We cannot continue to rely on inventory consumption to sustain ourselves,” he said.
He also said that if the military conflict continues for a long time and these buffer mechanisms fail, the upcoming energy shock will be a “major blow” to the global economy and “destroy the market mechanism.”
Summary FAQ
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He said supplies would be largely blocked if the conflict in the Middle East escalates and even affects tanker shipping in the strait and the Red Sea. The price of oil will not only reach 120 US dollars, but can directly reach 150 US dollars.
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First, China has significantly reduced crude oil imports, which is equivalent to suppressing demand; Second, countries have used large amounts of government and corporate inventories to cool the market. Now that these buffers have been depleted, the oil market has become even more vulnerable.
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Ilan warned that continued military conflicts would lead to an energy shock and become a major headwind for the global economy; Along with higher borrowing costs, they could also weaken market mechanisms and increase the risk of economic downturn.
