$100 Oil per Barrel Possible as Middle East Tensions Rise: Citi Group

Vinod Dsouza
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The tensions in the Middle East are escalating as Israel vows to strike back at Iran for launching missile drones. Iran hit Israel with drones on Saturday and the Iron Dome intercepted all incoming missiles from the Islamic Republic. The situation now remains grim with murmurs of a World War 3 looming across the region. The Middle East controls the world’s gas and energy sector and a barrel of crude oil currently stands at $85.

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The unending conflicts between Israel and Palestine, and now Israel and Iran could make oil prices shoot up. Iran’s risk of military action despite warnings from the US could make oil prices rise by 18%. The development leads to market instability and the US equities could be the first casualty when oil prices surge.

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Citi Group Predicts $100 Oil per Barrel as Middle East Tensions Rise

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The world’s leading bank Citi Group wrote in its latest piece to stakeholders that if Iran attempts to disrupt tanker traffic in the Strait of Hormuz, oil prices could surge exponentially to $100. “What is not priced into the current market, in our view, is a potential continuation of a direct conflict between Iran and Israel, which we estimate could see oil prices trade up to $100/bbl, depending on the nature of the events,” it said.

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Lipow Oil Associates went a step ahead predicting that oil prices could even reach $130 per barrel. “Any attack on oil production or export facilities in Iran would drive the price of Brent crude oil to $100. And the closure of the Strait of Hormuz would lead to prices in the $120 to $130 range,” they told CNBC.

They also revealed that an escalation involving the Middle East could make oil reach $140 per barrel. Therefore, the global markets remain on a slippery slope as a dramatic crash across all sectors is likely to occur. Investors are now parking their money in gold and the US dollar as it’s a safe haven during global turmoil.