Global oil prices could surge to $130 a barrel if the current crisis deepens, according to Igor Yushkov, an analyst at the Financial University under the Government of the Russian Federation and the National Energy Security Fund. He shared his forecast with Russia's National News Service (NSN).
Yushkov said the global oil market is balancing on the edge of an acute shortage. He said there have been no full-scale supplies of oil and oil products from the Middle East since March, and that the world has been drawing down its strategic reserves, which have fallen to levels last seen in 1982.
Nervous market, tighter reserves
Yushkov said this situation is creating nervousness in the market. He said that as global strategic oil reserves keep shrinking, crude prices may continue to climb. He added that the situation with refined oil products is even more strained, because they can only be stored for limited periods of time.
The Financial University under the Government of the Russian Federation is one of the country's leading state economics schools, while the National Energy Security Fund is a Moscow-based research body that studies global energy markets. NSN is a Russian state-linked news agency.
Houthi attack on Saudi pipeline
Yushkov said the situation on the world market could be further complicated by an attack by Yemen's Houthi movement on Saudi Arabia's East-West pipeline. He said that if repair work drags on for several weeks, the supply shortage could intensify. In that case, he said, the price of oil could climb to between $120 and $130 a barrel.
The Houthis, formally known as Ansar Allah, are an armed movement based in Yemen that has repeatedly targeted Saudi and Gulf energy infrastructure. Saudi Arabia's East-West pipeline carries crude across the kingdom from its eastern oil fields to Red Sea export terminals.
Western analysts share similar view
Western analysts have previously offered similar forecasts, also citing the Houthi attack on the East-West pipeline as a key factor behind the risk of rising prices.
