Analyst: Oil Prices Hit Over Two-Year High, Current Situation Poses Real Risk to Global Economy

According to sources, after Qatar's energy minister warned that oil production in the Gulf region could come to a complete halt within days, oil prices have risen to their highest level in over two years. Rystad Energy analyst Jorge Leon stated that the current situation poses a real risk to the global economy. If this situation persists for more than two weeks, the possibility of significant impacts on the energy system and global macroeconomic outlook will be much greater. If Gulf countries are unable to export oil, they will need to store it, and when storage space runs out, production will have to stop. It is 'realistic' to expect oil prices to exceed $100 per barrel, but the key is how long prices will remain at this level. At that point, governments around the world are likely to release their oil reserves, as seen after the Russia-Ukraine conflict. Quilter investment strategist Lindsay James stated that a long-term halt in all oil and gas production in the Gulf region is an extreme scenario. Market trends indicate that investors expect the issue of the closure of the Strait of Hormuz to be resolved quickly, but the risk of the conflict lasting longer than initially expected increases every day. For households, the pressure will mainly be felt in energy prices rather than broad inflationary impacts. The greater economic risk comes from the continued rise in energy costs, which could severely hamper economic growth.

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