Sparta Oil Analyst Warns of Brent Price Spike to $120-125

Brent crude oil prices may reach $120-$125 per barrel if Middle East supply disruptions persist, warned Abhishek Kumar, Senior Oil Analyst at Sparta Commodities. The current supply tightness is largely due to the attack on the Yanbu or East-West pipeline, which takes out close to 4% of global supply.

Kumar stated that the loss of supply through the East-West pipeline could keep prices elevated. He also pointed out that the immediate supply buffer from the affected infrastructure could last only around five to seven days, while damage could take a couple of weeks to repair.

If the disruption continues for four weeks, the market could face a supply shortfall of close to 3-4 million barrels per day, according to Kumar. The analyst also mentioned that an alternative route through the Strait of Hormuz is available, but risks and limited availability of very large crude carriers (VLCCs) could make it difficult to move the additional crude.