Oil is hovering above $100 a barrel globally

24/10/2026

Any imminent escalation between the United States and Iran would almost certainly push oil prices above $150 a barrel, with petroleum product prices exceeding $250, particularly heating oil. The current political situation in the Arabian Gulf region is highly volatile. This could lead to war and eventually result in the closure of the Strait of Hormuz. Global oil inventories are currently tight, and any further withdrawals from strategic oil reserves could place additional pressure on efforts to rebuild inventories worldwide. Concerns are growing over the possibility of a further decline in global crude oil inventories as a result of daily threats to close the Gulf.

The current oil market, both for crude oil and, more particularly, petroleum products, remains tight. This has led to an intense search for any available surplus oil to replenish inventories in consuming countries. With oil prices already at elevated levels, Russian Urals crude is trading at $133 a barrel. The United States is also importing more oil from Russia following the easing of restrictions, including the resumption of Russian diesel imports during the winter months. These imports could continue for longer, depending on demand in the United States and its commitment to supplying Europe with finished petroleum products. The United States is also dependent on oil imports from Venezuela.

The United States has reached an agreement with Russia following the lifting of the boycott, allowing Russia to supply more than 300,000 tons of diesel fuel, with an additional 500,000 tons scheduled for November, followed by one million tons and up to three million tons thereafter. Given the current oil market situation and the uncertainties surrounding global supplies, it would not be surprising to see oil prices rise further. Alternative sources of oil are limited, while daily threats to close the Strait of Hormuz remain a major concern. Any escalation or outbreak of war involving Iran could lead to the closure of the Arabian Gulf, bringing oil shipments from the Gulf to an almost complete halt.

The global oil supply situation is certainly on the brink, and any further disruption could trigger panic in an already tight market, pushing oil prices to significantly higher levels. Consequently, oil prices reaching $135- $140 a barrel are entirely possible, triggering an explosive rise in global inflation. This is a scenario we sincerely hope to avoid.

By Kamel Al-Harami
Independent Oil Analyst
email: [email protected]