Here’s Why Oil Prices Could Surpass $100 In Q4 2024

Middle East Tensions Send Oil Prices Soaring

What a difference a week makes. It was exactly one week ago to this day when OPEC signalled its willingness to weaken Oil prices to defend market share. But now the narrative has quickly flipped in the opposite direction on rising concerns that escalating tensions in the Middle East could push Oil prices back into triple digits.

These rapidly changing market dynamics have presented savvy traders with a series of highly lucrative opportunities to capitalize the recent macro-driven pullback as well as the huge price reversal that has subsequently followed.

According to GSC Commodity Intelligence – “today´s ever-evolving and dramatically changing financial landscape marks the beginning of a ‘new era’ for macro traders”. That’s why a long list of the world’s most powerful Wall Street banks have dubbed the current economic climate as “The Golden Age of Trading”.

To quote analysts at GSC Commodity Intelligence – “when Oil goes on sale, you have to snap it up fast because in this current geopolitical environment prices don’t stay cheap for long”.

And that’s exactly the trend we’re seeing play out right now across the Crude Oil market.

The recent Iranian strikes on Israel have restored a geopolitical war premium to Oil markets as the prospect of military escalation between the two Middle East foes calls into question vital flows from the world’s top petroleum-producing region.

On Tuesday, Brent Crude Oil prices rocketed over 5% following Iran’s missile attack on Israel. Oil prices continued to surge on Wednesday, breaking above $76 a barrel – adding more than $6 in two days.

The Big Question Now Is: How High Will Oil Prices Go in Q4 2024?

Iran is the third largest Oil producer among the Organization of the Petroleum Exporting Countries – producing almost 4 million barrels of Oil per day, according to data from the Energy Information Administration.

Conclusive evidence shows, as Israel turns from Gaza to Lebanon and Iran, the war is entering a new and more energy-related phase. Iranian Oil infrastructure including its sprawling network of Oil fields, pipelines, storage tanks, export terminals and processing plants may soon become a target for Israel.

Ultimately, all of this means one thing. The Middle East conflict could impact global Oil supply on a far greater scale than ever seen before.

In light of latest developments, there are three possible scenarios that could play out from here.

Oil prices could likely soar towards $85 a barrel if the United States and its allies places new economic sanctions on Iran. Beyond that, Oil prices could test the $90 a barrel mark should Israel strike Iranian energy infrastructure. However, the biggest and most significant impact would be a disruption to flows through the Strait of Hormuz, which could potentially push Oil prices back above $100 a barrel.

For a look at all of today’s economic events, check out our economic calendar.