As danger looms over the globally strategic Strait of Hormuz set off by intense geopolitical turbulence from US and Israel's missile strikes in Iran, Independent Commodity Intelligence Services experts are predicting a sharp surge in Brent crude, surpassing 8% in early Asian trade on 2 March
The prices briefly exceeded US$82 per barrel before easing back above US$78, while WTI traded around US$72. Shipping activity across the Strait of Hormuz has come to a standstill, adversely affecting the Gulf oil and LNG exports. Halth in the movement of LNG tankers since 28 February has disrupted around 120 bcm per year of supply from Qatar and the UAE. To add perspective, this volume is substantial enough to match the gas Europe has lost from Russia since 2021.
The tensions have sharply reflected on the global petrochemical markets as well, with China recording over 6% rise in methanol futures, reacting to supply concerns from Iran, the world’s second largest methanol producer. According to ICIS analysts, the current uncertainties are likely to prevail long enough to overhaul market expectations and pricing behaviour. Brent can potentially reach as much as US$100 per barrel if the closure persists, although renewed US Iran talks could limit further gains.
The missile attacks, which reportedly killed Iran’s Supreme Leader Ayatollah Ali Khamenei, came amid recent nuclear negotiations in Geneva, adding to already elevated crude prices and heightening uncertainty across global energy and chemical markets.
ICS predicts sharp surge in Brent crude amid geopolitical tensions
Shipping activity across the Strait of Hormuz has come to a standstill.
