Oil Price Seen At US$95-US$110 On Sustained Hormuz Impairment, Refinery Outage And Inventory Draws
By Nor Baizura Basri
KUALA LUMPUR, Sept 8 (Bernama) -- Global oil prices are expected to range between US$95 and US$110 per barrel following a core risk-adjusted price regime due to sustained Hormuz impairment, additional refinery outages and accelerating inventory draws, says an economist.
Juwai IQI global chief economist Shan Saeed said accelerating inventory draws could propel Brent toward US$120 to US$130 per barrel, with a weaker dollar amplifying the move. "In this cycle, scarcity sets the floor, geopolitics sets the ceiling, and the marginal barrel sets the tape," he told Bernama here.
He noted that the global oil market has entered a structurally elevated risk regime.
"The range for Brent remains at US$95-130 per barrel of oil (bbl): the lower bound increasingly represents the market’s risk-adjusted clearing price, while the upper bound - identified by Bank of America as an unlikely tail scenario if Gulf disruption extends into the second half - becomes credible should physical disruption deepen.
"Price action already reflects that repricing. Brent settled near US$60.75 per barrel on Jan 2 and traded near US$97.50 per barrel on Sept 7 - an increase of roughly 60 per cent year-to-date. After consolidating near US$96 a barrel on Sept 4, Brent resumed its advance, suggesting that profit-taking interrupted - but did not reverse - the broader repricing," he said.
Shan said three forces would keep the distribution decisively skewed higher - geopolitics, near-term supply and physical buffer.
"Hormuz traffic remains sharply depressed as US-Iran hostilities intensify, embedding a persistent premium across physical and forward markets. Goldman Sachs sees oil at US$120/bbl if attacks on Middle Eastern shipping escalate, versus approximately US$80/bbl if exports normalise. The asymmetry is decisive: $95 is a geopolitical floor under prevailing conditions, not an unconditional one.
"Second, near-term supply elasticity is severely constrained. The International Energy Agency projects global supply to decline by 4.3 million bpd on average in 2026. Observed inventories have fallen by 410 million barrels since the conflict began, while the agency projects a 1.8 million barrels per day (bpd) third-quarter deficit. July refinery throughput remained nearly five million bpd below year-earlier levels, tightening diesel, jet-fuel and gasoline balances simultaneously," he said.
As for physical buffer, he said it is eroding, citing a Russian forecast that places 2026 crude output at 9.88 bpd - the lowest since 2009 - as geopolitical and operational pressures weigh on production and refining capacity. “Renewed dollar weakness would add upside convexity by supporting dollar-denominated commodities and easing the local-currency burden for some importers," he added.
As of 4.10 pm, Brent crude rose 1.75 per cent to US$98.70 per barrel while U.S. West Texas Intermediate crude was at $94.21 a barrel, up 2.98 per cent.
-- BERNAMA