#国际油价突破100美元 March 9th, international oil prices completely "exploded." New York crude oil futures soared to $111.24 per barrel at one point, while Brent crude also reached $111.04, both breaking the $100 mark—this is the first time since the Russia-Ukraine conflict in 2022.
Over the past week, U.S. crude oil prices have increased by approximately 35%, marking the largest weekly gain since 1983. This surge in oil prices has directly impacted global stock markets. The Nikkei 225 index fell over 6%, the KOSPI index in South Korea triggered a trading halt with a sharp decline, and the Australian stock market lost nearly 121 billion AUD.
Why did prices suddenly break the $100 mark?
The issue lies in the Strait of Hormuz. This narrow waterway, less than 50 kilometers at its narrowest point, carries about 20% of global oil trade. But currently, due to tense Middle Eastern tensions, commercial shipping has nearly come to a halt. JPMorgan data shows that, previously, about 138 ships passed through daily; now, that number has sharply decreased by 94%.
The consequences are severe: Iraq's oil production has plummeted from 4.3 million barrels per day to 1.7-1.8 million barrels; Kuwait and the UAE have been forced to cut production due to full storage facilities; Qatar's LNG production is also affected.
Will prices stay high long-term?
CICC offers two possible scenarios: the baseline scenario (disruption in the Strait of Hormuz ends within 2 weeks): Brent oil prices are forecasted to rise to a midpoint of $80 per barrel in Q2, with prices fluctuating between $70 and $80 for the year.
Risk scenario (disruption continues into Q2): oil prices could surge above $120 per barrel, or even higher.
Goldman Sachs and Barclays also warn that if the conflict persists, oil prices could test $120. JPMorgan's chief economist states that if the conflict expands and continues, prices could break above $120, increasing the risk of a global recession. In the short term, the upside potential for oil prices depends on the situation in the Strait of Hormuz. Geopolitical risk premiums are expected to remain elevated.
