US-Iran Ceasefire Collapse Sends Brent Crude Soaring Towards $100
The collapse of the US-Iran ceasefire deal has significantly altered oil price forecasts, pushing Brent crude towards $100 per barrel. Rapidan analysts note that if the conflict expands to civilian infrastructure, particularly power and desalination facilities, the supply disruption will worsen.
The Strait of Hormuz, through which about 20% of global oil flows daily, has been severely disrupted, with analysts expecting shipping volumes to return to only around 35% of pre-war rates by October. It may take years for the strait to fully recover from the damage caused by the conflict.
Rapidan also forecasts that the worldwide oil market will remain undersupplied for another year at least. However, China's ongoing drawdown of its crude inventories has provided a temporary cushion against even sharper price increases, but this buffer could disappear quickly if optimism over a renewed peace agreement fades and supply continues to tighten.