The war between the United States and Israel with Iran will continue to drive oil prices up until 2027. Brent crude oil contracts for January 2027 are currently trading at $102.59 per barrel. Meanwhile, the June 2027 contract is slightly lower at $92.71 per barrel, and the December 2027 contract is trading at $84.75 per barrel.
Fear of Supply Shortages
Now that prices have significantly increased, many analysts and oil market participants expect supply to remain constrained. While multiple reports indicate an increase in oil flow from the Persian Gulf to pre-war levels, this has not significantly impacted price reductions. This is due to a crisis of confidence in official figures and high transportation costs, which have led to increased shipping costs and discounts on oil from Gulf producers.
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Challenges in Refined Fuel Supply
In terms of refined fuels, especially diesel, the situation is even more complicated. Many refineries in the Middle East have been targeted by retaliatory attacks from Iran, leading to reduced fuel supply. The International Energy Agency has announced that it will release more than 20 million barrels of diesel from its collective reserves to fill the supply gap. This amount may reach 50 million barrels, which is half of the total reserve released that agency members agreed upon earlier this month under tariff pressure.
Future Energy Price Forecast
Despite these developments, the International Energy Agency remains hopeful that peace between the United States, Israel, and Iran is merely a matter of time. According to the agency's latest monthly report, global oil supply is expected to increase to 108.3 million barrels per day. This increase indicates that oil flows from the Middle East have not yet returned to pre-war levels. This situation could prolong inflationary pressures from high energy costs on the global economy for a longer period.
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