ARK Invest Sees Oil Prices Plummeting to $30-35 per Barrel
Cathie Wood-led ARK Invest expects oil prices to plummet despite tensions over the Strait of Hormuz and US-Iran relations. The firm points to falling global demand for oil, with electric vehicles emerging as a prime beneficiary of this shift.
ARK cites recent International Energy Agency projections showing global production dropping 5.7 million barrels per day to 100.7 mbd, alongside a 2.5 mbd decrease in global demand. The firm notes that the Strait of Hormuz crisis has generated both supply bottlenecks and declining oil demand.
According to ARK, the price spike triggered by the Iran War led to a 60% drop in oil prices from $23 to $9 per barrel in 1986. This time around, the firm predicts that oil prices could drop back towards $30-35 per barrel over the next few years.
The UAE has increased production by 78% since March, potentially muting the price impact of the Strait of Hormuz crisis after exiting OPEC. ARK suggests that countries like the UAE are transitioning to alternative energy sources such as natural gas, nuclear power, hydro, and solar energy.