Global oil prices have climbed closer to the $90 mark, driven by increasing geopolitical instability. The surge in energy costs has begun to impact corporate balance sheets, with travel giant Tui reporting significant profit losses due to rising fuel expenses.
Long-Term Price Projections Revised
In response to the renewed hostilities between the US and Iran, Oxford Economics has adjusted its outlook for the commodity. The research firm now anticipates that Brent crude will hover near $85 per barrel through the end of this year, representing a notable increase from previous estimates.
The report suggests that while a total shutdown of the Strait of Hormuz is unlikely, a sustained reduction in shipping traffic is now the most probable scenario. Analysts point to deep-seated mutual distrust as a primary barrier to reaching a lasting diplomatic agreement, keeping prices elevated in the near term. The forecast indicates a gradual decline to approximately $65 per barrel by 2027 as market conditions potentially stabilize.
Source: The Guardian