WSJ: Saudi Arabia forecasts oil prices could exceed $180 per barrel

Saudi Arabia’s oil sector predicts that prices could rise above $180 per barrel if supply disruptions continue through the end of April, The Wall Street Journal reports, citing industry sources.

Officials view this scenario as the baseline, as they assess the potential impact of price increases amid the ongoing conflict with Iran and continued energy supply interruptions.

While higher oil prices may initially benefit the kingdom, there are concerns that consumers could reduce consumption, potentially creating long-term negative effects on the market.

“Saudi Arabia generally does not like too-rapid increases in oil, because that then creates long-term market instability,” Umer Karim, an analyst of Saudi foreign policy and geopolitics with the King Faisal Centre for Research and Islamic Studies, said. “For Saudis, the ideal equation is a relatively modest increase in prices while their market share remains stable.”

Saudi Aramco, the nation’s state-owned oil company responsible for production, sales, and pricing, chose not to provide a comment.

Recent strikes on energy infrastructure have driven oil prices upward. Following an Israeli strike on Iran’s South Pars gas field on March 18, Tehran retaliated by targeting facilities in Qatar’s Ras Laffan energy complex and other Gulf infrastructure, including Saudi installations at Yanbu, located at the Red Sea end of a pipeline that bypasses the strategic Strait of Hormuz.

Iran also continued attacks on vessels in the Gulf, contributing to the near-closure of the strait, which carries about 20% of global oil shipments.

The assaults pushed Brent crude futures to $119 per barrel before easing on March 19, far below the contract’s record high of $146.08 set in July 2008.

By Jeyhun Aghazada