KUWAIT, Current geopolitical conditions in the Gulf region namely mounting tension between the United States and Iran are expected to lead to rising oil prices, according to Kuwaiti experts.
In interviews with Kuwait News Agency (KUNA), the experts have pointed out that impact on the crude oil prices largely depends on the manner the current crisis will be addressed; indicating that the crude prices may steady if the issue is tackled with diplomacy.
Ahmad Al-Kouh, a petroleum analyst, said geopolitical impact on oil prices would be direct and for a specific period, noting that the latest round of escalation between Tehran and Washington pushed the oil price high by three dollars.
He expressed the belief that a forecast rise of the oil prices would be largely due to psychological factors rather than factual stimulants, noting that navigation via the Gulf waters and crude production in the regional countries have proceeded as regular.
Abdulsamee Bahbahani, also an expert in the sector, said oil prices, in shadow of the crisis, have increased rapidly reaching the level of USD 70 per barrel for the Brent in particular.
Global oil reserves are currently high, thus the prices fluctuations will be relatively slow on weekly basis, Bahbahani said.
He underscored necessity of protecting regional waterways via which GCC countries export 80 percent of their crude output
Meanwhile, Khaled Boodai, the oil expert at Al-Ofoq Consulting Center, noted that oil prices are, under regular circumstances, are affected with demand and supply, economic growth, crude reserves and geopolitical jitters.
Tensions related to the crisis have begun to affect the oil prices amid consumers’ tendency to purchase additional amounts of oil to beef up reserves in anticipation of any possible drastic escalation, according to Boodai.
Despite the prevailing bleak picture, Boodai rules out further military escalation between the US and Iran, expecting a political settlement as happened in similar situations in the past.
Oil prices in the foreseeable future are expected to wobble between USD 70 and 75 pb, he believed.
Source: Kuwait News Agency