Oil prices forecast to hit $100 per barrel again

Global crude oil prices are on the verge of breaching the $100 per barrel mark, driven by escalating geopolitical tensions and the threat of supply disruptions in the Middle East. Brent crude closed at $91.09 per barrel, a 2.38% increase, while WTI settled at $85.09.

Dr. Abdul Rais Abdul Latiff, a senior economics lecturer at Universiti Sains Malaysia, anticipates moderate volatility in crude oil prices this week. He notes that West Texas Intermediate (WTI) crude could target $93.80 per barrel if it surpasses the $87 resistance level. Meanwhile, Brent crude might surge to $125 per barrel if it breaks through the $100 mark.

"Besides supply factors, the market is also considering lower global oil inventory levels," Abdul Rais stated. The Energy Information Administration (EIA) projects that disruptions through the Strait of Hormuz will continue to pressure global inventories, maintaining high oil prices.

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Besides supply factors, the market is also considering lower global oil inventory levels. The Energy Information Administration (EIA) expects disruptions through the Strait of Hormuz will continue to pressure global inventories in the near future, thus keeping oil prices at high levels.

He further explained that the recent increase in crude oil prices is linked to Iran's warnings of potential offensive actions if diplomatic channels fail. This projection is fueled by the lack of progress in diplomatic efforts between Iran and the U.S. following the expiration of a Memorandum of Understanding (MoU) on August 17.

Iran's Foreign Ministry, via the Tasnim news agency, has rejected any negotiations to extend the MoU, while U.S. President Donald Trump has expressed no interest in renewing the agreement. The geopolitical situation remains tense, with Trump demanding Iran's surrender and threatening to attack U.S. ally Oman over its dealings with Tehran regarding traffic management in the Strait of Hormuz.

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The projection is driven by the lack of progress in diplomatic efforts between Iran and the United States (U.S.) after the Memorandum of Understanding (MoU) signed by both countries on June 17 expired on Monday (August 17).