Moody's foresees $85/Barrel average for crude oil
A fierce and ongoing conflict between Israeli forces and Hamas militants in the Gaza Strip has ignited concerns within global financial markets about the potential impact on crude oil prices. While neither side is a major oil producer, the geopolitical sensitivity of the Middle East region has raised fears that this conflict could disrupt oil supply chains, sending shockwaves through global energy markets.
Vikash Halan, Associate Managing Director of Corporate Finance at Moody's Investors Services expects crude oil prices to average $85 per barrel for the rest of the year.
"Of course, oil prices will fluctuate, but $85 as an average seems reasonable. Our medium-term prices have remained at $55 to $75 and remain unchanged," Halan told CNBC-TV18.
He added, “Over the longer term, we might see that there is more downside pressure on oil as opposed to upside pressure. But there is also a supply side that is getting quite volatile I would say with OPEC cutting down its production and Russian crude continues to be uncertain in terms of availability.”
Another crude oil market expert, Anish De, Global Head of Energy and Chemicals at KPMG, pointed out that while the current conflict may not involve major oil-producing regions, the fear is that it could spill over into other parts of the Middle East. He said, "These are not really crude-producing areas, and the hope is that the conflict remains localised. If it spreads to other areas in the region, that would be a very different story."
One critical factor to watch is Iran's alleged involvement in supporting Hamas' attacks. Any concrete evidence linking Iran to the conflict could lead to increased US sanctions on Iran's energy sector. Such sanctions have the potential to disrupt oil markets further by reducing Iran's oil exports, he said.
For the full interview, watch the accompanying video
(Edited by : Shweta Mungre)
First Published: Oct 10, 2023 6:26 PM IST
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