The consequences of the war in the Middle East and the closure of the Strait of Hormuz will be felt for a long time, according to oil market participants, Bloomberg reports.

A survey conducted by Bloomberg Intelligence among 126 asset managers and several other energy market specialists showed that the majority of them predict that the average price of Brent crude oil will reach $81-100 within a year.

Almost two-thirds of those surveyed believe that the price premium will be $5-15 (per barrel) for several years due to the consequences of the war, the risks arising from it, and the change in the balance of power in the region. Only a small number of participants expect a premium of $20 or more.

This distribution of responses suggests that geopolitical risks are seen as a constant, but not as a factor that will fundamentally change long-term price dynamics, Bloomberg Intelligence analysts commented on the results. On the contrary, respondents seem to proceed from the fact that demand and supply will gradually reach equilibrium, setting prices in a relatively stable range, they added.

According to the majority of respondents, the reduction in global average daily supplies will average 3-7 million barrels, and only a few expect this figure to exceed 10 million.

Saudi Arabia has already managed to diversify its export routes, as a significant amount of oil previously passing through the Strait of Hormuz is now transported by pipeline to ports in the Red Sea.

In parallel, the UAE has completed half of the construction of a second main pipeline. According to Sultan Ahmed Al Jaber, the CEO of the Emirati state giant ADNOC, this will enable oil to be delivered via a bypass route to the Port of Fujairah in the Gulf of Oman, which has direct access to the ocean. Thanks to this project, the UAE will be able to more than double its oil export capacity to Fujairah. The first pipeline currently operating provides a daily transport of 1.8 million barrels.

Source: https://news.am/en/news/1037196