International Oil Prices Surpass $70 per Barrel... "Low Possibility of Prolonged Uptrend"

[Image source=Yonhap News]

[Asia Economy Reporter Hwang Yoon-joo] As tensions in the Middle East escalate due to conflicts between the United States and Iran, international oil prices have surpassed $70 per barrel. Commodity experts predict that while international oil prices may continue to rise in the short term, the likelihood of a full-scale war between Iran and the U.S. is low, and prices are expected to stabilize in the long term.

As of 10 a.m. local time on the 6th, Brent crude oil March futures on the London ICE Futures Exchange surged 2.2% from the previous day's closing price to trade at $70.11 per barrel. West Texas Intermediate (WTI) February futures on the New York Mercantile Exchange (NYMEX) also rose 1.9% to $64.27.

The volatility in international oil prices stems from the U.S. drone strike on January 3rd that killed Qassem Soleimani, commander of the elite Quds Force of the Iranian Revolutionary Guard Corps, prompting Iran to threaten retaliation. There are concerns that, in the worst-case scenario, Iran could block the Strait of Hormuz.

The Strait of Hormuz accounts for 15% of the world's oil transportation volume. Ninety percent of the oil South Korea imports from the Middle East and 70% of the Middle East's oil exports pass through the Strait of Hormuz. A maritime blockade there could significantly impact global oil supply and demand, affecting not only South Korea but the entire world.

Although the Middle East risk is expected to sustain strong international oil prices for the time being, the market consensus is that the likelihood of prices surpassing $100 per barrel is low.

Shim Hye-jin, a researcher at Samsung Securities, stated, "The possibility of a full-scale war between the U.S. and Iran is considered low. For the time being, international oil prices will maintain current levels due to heightened geopolitical risks, but as the likelihood of full-scale conflict decreases and U.S. oil inventory increases in the first quarter are confirmed by data, prices are expected to turn downward."

Seo Sang-young, a researcher at Kiwoom Securities, also forecasted, "International oil prices face upward pressure in the short term due to concerns over supply disruptions in the Middle East, but considering changes in the oil supply and demand market, the upward trend is unlikely to be prolonged."

This content was produced with the assistance of AI translation services.