Oil prices expected to stay high for days, all eyes on Strait of Hormuz flows

Core Viewpoint - Oil prices are expected to remain high due to escalating conflicts in the Middle East, particularly affecting supply flows through the Strait of Hormuz, which accounts for over 20% of global oil supply [1]. Group 1: Oil Price Projections - Crude futures surged more than 8% to multi-month highs following U.S. and Israeli attacks on Iran, leading to significant market volatility [1]. - Citi analysts predict Brent crude will trade between $80 and $90 per barrel in the coming week, with a potential pullback to $70 if tensions de-escalate [1]. - Goldman Sachs estimates an $18 per barrel risk premium in crude prices, which could decrease to a $4 premium if 50% of flows through the Strait of Hormuz are halted for a month [1]. Group 2: Supply Disruptions - Wood Mackenzie warns that oil prices could exceed $100 per barrel if tanker flows through the Strait are not quickly restored, indicating a dual supply shock affecting both current exports and OPEC+ spare capacity [1]. - OPEC+ has agreed to increase output by 206,000 barrels per day for April, but the ongoing conflict may hinder effective supply management [1]. - Societe Generale analysts suggest that the most likely scenario is a short-lived spike in oil prices, followed by a partial retracement as markets assess supply continuity [1].