Kuala lumpur: Global oil prices are forecasted to fluctuate between US$95 and US$110 per barrel due to a core risk-adjusted price regime influenced by sustained Hormuz impairment, additional refinery outages, and accelerating inventory draws, as reported by an economist.
According to BERNAMA News Agency, Juwai IQI global chief economist Shan Saeed indicated that the accelerating inventory draws could propel Brent crude prices toward US$120 to US$130 per barrel, with a weaker dollar amplifying the move. Saeed remarked, "In this cycle, scarcity sets the floor, geopolitics sets the ceiling, and the marginal barrel sets the tape."
Saeed noted that the global oil market has entered a structurally elevated risk regime, with the range for Brent crude remaining at US$95-130 per barrel. 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.
He further explained that the price action already reflects that repricing. Brent settled near US$60.75 per barrel on January 2 and traded near US$97.50 per barrel on September 7, marking an increase of roughly 60 percent year-to-date. After consolidating near US$96 a barrel on September 4, Brent resumed its advance, indicating that profit-taking interrupted but did not reverse the broader repricing.
Saeed highlighted three forces expected to 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 predicts oil at US$120/bbl if attacks on Middle Eastern shipping escalate, versus approximately US$80/bbl if exports normalize."
He added that near-term supply elasticity is severely constrained, with the International Energy Agency projecting global supply to decline by 4.3 million barrels per day (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 bpd third-quarter deficit. July refinery throughput remained nearly five million bpd below year-earlier levels, tightening balances of diesel, jet-fuel, and gasoline simultaneously.
Regarding the physical buffer, Saeed cited a Russian forecast predicting 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 percent to US$98.70 per barrel, while U.S. West Texas Intermediate crude was at US$94.21 a barrel, up 2.98 percent.