World could face repeat of 2008 crisis, Bloomberg reports
Photo: oil refinery (Getty Images)
Analysts at the consulting firm Rapidan Energy Group have warned of the risk of further increases in oil prices amid instability in the global market, Bloomberg reports.
What scenario analysts are forecasting
The baseline forecast from Rapidan Energy Group suggests that the water route could resume operations as early as July. In this case, global oil demand may decline by an average of 2.6 million barrels per day.
Against this backdrop, the price of benchmark Brent crude is expected to approach around $130 per barrel during the summer.
What could happen if the situation worsens
Experts believe that continued supply disruptions could intensify pressure on the market in August and September. To offset the shortfall, an even more significant reduction in demand would be required.
Rapidan Energy Group does not rule out that the consequences could be severe enough for global oil consumption to decline year-on-year in 2026. Some leading analytical centers are already forecasting a rare drop in global demand for crude oil.
Why prices continue to rise
Since the end of February, oil prices have nearly doubled. The reason is the war between the United States, Israel, and Iran, which has increased tensions on global markets and fueled fears of accelerating inflation and slower economic growth.
"The current macro setup is less extreme than the 1970s or 2007 to 08," analysts at Rapidan Energy Group noted.
At the same time, they emphasized that further increases in oil prices could heighten financial and macroeconomic risks.
Market may face a supply deficit
According to the company’s estimates, if supply restoration is delayed until August, the oil deficit in the third quarter could reach about 6 million barrels per day.
Even with a partial resumption of supplies in early August, the market would continue to feel pressure for some time, as crude oil inventories would keep declining and production in Gulf countries would recover only gradually.
On May 22, global oil prices turned upward; however, the market still maintains a weekly downward trend. Pressure on prices continues to come from uncertainty around negotiations between the United States and Iran, as well as risks related to the situation around the Strait of Hormuz.
The Lukoil oil refinery Nizhny Novgorodnefteorgsintez (NORSI), one of the five largest refineries in Russia, partially suspended operations after a drone attack that disrupted the plant’s production processes.
