JP Morgan "Brent Oil $150 per Barrel Forecast"
Gukgeum Center "Supply Shortage May Be Less Concerning"
On the 4th, as international oil prices fall and fuel tax cuts are further implemented, citizens are refueling their vehicles at a gas station in downtown Seoul. Photo by Moon Honam munonam@
As major oil-producing countries including Saudi Arabia continue production cuts, driving international oil prices to soar, another forecast has emerged suggesting that global oil prices could rise significantly above $100 per barrel in the future.
Christian Malek, an oil market analyst at JP Morgan, stated in a report on the 22nd (local time) that due to supply shortages and an energy supercycle, the global benchmark Brent crude price could reach $150 per barrel.
Brent crude prices have surged from the mid-$80s per barrel in July to the mid-$90s recently, influenced by production cuts from oil-producing countries such as Saudi Arabia and Russia. On the 22nd (local time), Brent crude closed at $93.27 per barrel.
Although the upward momentum paused briefly amid growing expectations of prolonged tightening by the U.S. Federal Reserve (Fed), supply concerns remain persistent.
If the U.S. maintains high interest rates, economic growth may slow and oil demand could decrease, leading to a drop in international oil prices. However, in the medium to long term, higher U.S. interest rates increase financing costs, causing energy companies to reduce investment, which could further tighten supply.
Accordingly, Malek’s report forecasts Brent crude to trade between $90 and $110 per barrel next year, reach $100 to $120 per barrel in 2025, and potentially hit $150 per barrel in 2026.
South Korea’s heavy dependence on energy imports means that rising international oil prices will significantly burden inflation and the economy.
However, some analyses suggest that if oil demand declines due to economic recessions in major countries, the upward trend in international oil prices may slow down.
The Korea Center for International Finance explained in a report released the previous day, "Supply shortages are inevitable until the end of the year, and the possibility of triple-digit international oil prices temporarily cannot be ruled out," but added, "With increased production from other oil-producing countries and the potential slowdown in global oil demand, the rise in international oil prices is expected to gradually stabilize."
They explained that if global growth slows and oil demand decreases, the supply shortage caused by production cuts from oil-producing countries may be less severe than feared.
The center analyzed, "While the price increase may temporarily expand, on average it is unlikely to significantly exceed current levels," and "the market forecasts $100 per barrel but evaluates its sustainability as very low."
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