Due to increasing tension between Iran and America and bombings from both sides, there has been an increase of about 10 percent in the prices of crude oil in three days. A day ago, the crude oil of Gulf countries had even crossed the level of $ 80 per barrel. After that it automatically came down to $77 per barrel. At present it is trading at the level of 78 to 79 dollars per barrel.
Homurz Strait is closed. Sanctions have been imposed again on Iran. Trump has threatened that if Iran attacks again, the next attack will be retaliated with 10 times more destruction. It is clear that an atmosphere of tension has been created from both sides. Now the biggest question is if the situation continues like this for the next 2 months. Or if the war starts again, will the prices of crude oil again be seen at the level of $120?
According to experts, the prices of crude oil have discounted the war factor. As was seen during the war between Ukraine and Russia in the year 2022. According to experts, crude oil production is increasing all-round. In such a situation, the price of crude oil is expected to be around $70 per barrel.
On the other hand, prices may also be seen getting support due to filling of strategic reserves with war, maintenance of production facilities before the storm in America in August and filling of countries which have emptied their reserves. Even after that, the price of crude oil will be seen reaching above $85 per barrel. Let us also tell you what kind of predictions are being made by the experts.
Due to the end of the ceasefire and increasing tension between Iran and America, are the prices of crude oil going to cross $ 120 per barrel once again? On this, Ajay Kedia, Director of Kedia Advisory, said that even after this increase in tension, there is no possibility of crude oil prices going beyond $ 120 per barrel this time. He said that crude oil prices have completely digested the war effect. Because of which the impact of the war on crude oil prices is likely to be much less. In such a situation, no matter how much the war tension increases between the two countries, the price of crude oil is not likely to remain more than 80 to 81 dollars. He said that this is similar to what Russia saw during the Ukraine War. When there was a rise in the prices of crude oil in the initial days, after that it became stable. It has been more than 4 months since this war. In such a situation, the impact of this war has also reduced.
On the other hand, the reason for the non-increase in crude oil prices is also the increase in production. Recently there was news that OPEC is going to increase the production of crude oil. In the recently held OPEC Plus meeting, the group of oil producing countries has agreed to increase the production target by a total of 1,88,000 barrels per day from August. This is the fifth consecutive month that the group has decided to increase production. This increase in production comes after a similar increase announced for June and July. Saudi Arabia, Russia, Iraq, Kuwait, Kazakhstan, Algeria and Oman are included in this increase in production.
A Reuters survey found that OPEC's crude oil production in June increased by 3.3 million barrels per day to 19.43 million barrels per day from the previous month. It has recovered to this level after recovering from its lowest level in more than two decades. Exports from Gulf countries increased by more than 3 million barrels in June compared to May, taking shipments to above 10 million barrels per day. Despite this recovery, export volumes remained approximately 40 percent below pre-conflict levels. This is the reason that despite the tension continuing, there is no possibility of much increase in the price of crude oil. In such a situation, crude oil prices are likely to remain around $70 per barrel in the coming months.
Ajay Kedia further said that it is not that crude oil prices are going to remain low. When there was a lot of disruption in supply due to war and production in the Middle East was stopped, many countries including America and IEA had taken out their strategic reserves. In such a situation, due to fall in crude oil prices, everyone will start filling their strategic reserves. Prices will get support due to increase in demand. Besides, India and many other countries will also increase their strategic reserves. Due to which the prices will be seen getting support.
Ajay Kedia further said that along with the reserve, there is hurricane season in the month of August in America. Because of which companies take out their employees from the rigs. Along with this, maintenance work also starts in American refineries. Due to which there is reduction in production. Due to these reasons also, crude oil prices will be seen getting support.
Ajay Kedia said that due to all these reasons the prices of crude oil will not go above $ 85 per barrel. He said that the price of crude oil will neither go below $70 nor above $85 per barrel. Crude oil prices may be seen at these levels in the coming days. If we talk about today's prices, the crude oil of Gulf countries is trading at $ 77.47 per barrel with a decline of 0.74 percent. Whereas in the morning the prices of crude oil were seen near $ 79 per barrel with an increase of 1 percent. At the same time, the price of American crude is trading at $ 73.03 per barrel with a decline of 0.67 percent. Whereas in the morning it was trading at $ 74.50 per barrel.
