Brent crude prices rose 10% to around $80 a barrel in over-the-counter (OTC) trading on 1/3. Analysts predict prices could reach $100 following US and Israel airstrikes on Iran, sparking concerns over supply disruptions.
The disruption of the Strait of Hormuz, a critical maritime chokepoint, following these attacks has driven up oil prices, according to Ajay Parmar, Director of Energy and Petrochemicals at ICIS. Most tanker owners, major oil and gas corporations, and traders have temporarily halted shipments of crude oil, fuel, and liquefied natural gas through the Strait of Hormuz after Tehran warned vessels against transiting the waterway. Over 20% of global oil is transported through this strait.
"Prices could open early this week near $100 a barrel and may even surpass that threshold if the disruption in the strait persists," Parmar said. Middle East leaders have warned Washington that a war with Iran could push oil prices above $100 a barrel, according to RBC analyst Helima Croft. Rabobank analysts are more cautious, suggesting prices will remain above $90 a barrel in the short term.
 |
An oil tanker during an Iranian military exercise in the Strait of Hormuz in 2/2. Photo: AFP |
An oil tanker during an Iranian military exercise in the Strait of Hormuz in 2/2. Photo: AFP
Brent crude, the international market benchmark, has risen sharply since the start of the year, reaching $73 a barrel at the close of trading on 27/2. This marks its highest level since 7/2025. Economists at Rystad, including Jorge Leon, estimate that even with alternative routes, the closure of the Strait of Hormuz would result in a supply deficit of 8-10 million barrels per day. This figure accounts for a partial diversion of flows through Saudi Arabia's and Abu Dhabi's East-West pipeline. Jorge Leon predicts prices could increase by another $20 to approximately $92 a barrel when markets open for trading.
On 1/3, the OPEC+ group of oil-producing nations agreed to increase output by an additional 206,000 barrels per day starting 4/. However, this is a modest increase, equivalent to less than 0,2% of global demand, which may not significantly offset a major supply disruption.
The conflict in Iran has also prompted Asian governments and refineries to re-evaluate fuel reserves, shipping routes, and alternative supply sources. Analysts at energy consultancy Kpler state that India may turn to Russian oil to compensate for potential supply shortfalls from the Middle East.
The Strait of Hormuz is located between Oman and Iran, connecting the Persian Gulf to the north, the Gulf of Oman to the south, and further to the Arabian Sea. Last year, over 14 million barrels of crude oil per day flowed through this strait, accounting for one-third of the world's total seaborne fuel exports, primarily destined for Asia. Despite its critical strategic position for global trade, history shows this maritime route is frequently a geopolitical flashpoint, from the Iran-Iraq tanker war of the 1980s to recent threats of blockades and ship seizures.
Over-the-counter (OTC) trading is a direct transaction format between parties outside official exchanges, typically through brokers, banks, or private electronic networks. This market lacks a centralized price board or public order matching mechanism, so prices are often indicative and can fluctuate sharply due to low liquidity. During weekends, when oil derivatives exchanges are closed, OTC oil prices reflect traders' initial expectations regarding geopolitical events before official markets reopen.
By Tieu Gu (Reuters)
