US-Iran Tensions Spur Oil Price Spike Fears
Kuala Lumpur-based BIMB Securities has released a note warning of a possible oil price surge to US$100 per barrel due to escalating tensions between the US and Iran.
The research house points to the arrival of the USS George Washington in the Middle East as a key factor, which it believes will increase the risk of kinetic escalation against Iranian assets.
BIMB anticipates that with the Islamabad memorandum expired, the balance of risk has shifted towards escalation, potentially leading to the closure of the Strait of Hormuz and disrupting oil supplies.
The research house forecasts a 55% chance of an incremental normalisation scenario, where negotiations continue with occasional incidents and gradual traffic recovery, underpinning a base case outlook for Brent crude at US$85-US$100 per barrel.