Crude could hit USD 150 within weeks if disruption persists, global oil shortfall at 10-12 million bpd: Oil Analyst, Sparta Commodities

By Nikhil Dedha

Dubai [UAE], April 13 : Global oil markets are facing a severe supply crunch, with crude prices likely to surge further and potentially touch USD 150 per barrel within weeks if ongoing geopolitical tensions persist, according to Abhishek Kumar, Senior Oil Analyst at Sparta Commodities.

In an exclusive interaction withon Monday, Kumar said the oil market is currently being driven by both real supply disruptions and a rising risk premium amid escalating tensions in the Middle East.

He said, "We are already at upward of USD 100 per barrel. The physical benchmark for crude is 140, which is at what level the real barrel is moving to the refineries. If the situation remain elevated for another weeks to a month, mean, 150, it's very easily market can reach at that level if this lingers on".

He further added "the only solution to this is a demand destruction then market has to consume less oil so that I mean if we talk about balancing exactly uh the supply and demand market has to do the demand destruction to the tune of uh supply destruction that is 10 to 12 million barrels per day and then only we will be able to you know compensate and the prices will be a little bit take a breather but at this level if demand continue to remain as it is, 150 will not be or closer to 150 will not be far away".

Highlighting the scale of disruption, Kumar noted that the global oil market is witnessing a supply shortfall of around 10 to 12 million barrels per day, which accounts for nearly 10 to 12 per cent of total supply.

"We are talking somewhere around 10 to 12 million barrels per day loss. No country can fulfil that 10 per cent loss in the market," he said, highlighting the structural nature of the crisis.

The Strait of Hormuz, a critical global oil transit route, has emerged as a key flashpoint. Before the conflict, around 15 million barrels per day of crude used to pass through the strait, but flows have now reduced significantly due to disruptions and geopolitical risks.

Kumar pointed out that the situation has worsened following recent developments, including statements by US President Donald Trump on potential blockades, which could further restrict Iranian oil exports.

"If that has to happen, the market will be left with another 1.5 to 1.7 million barrels per day of Iranian crude missing," he said.

The tight supply situation has already pushed physical crude prices significantly higher than benchmark futures. While Brent is trading above USD 100 per barrel, Kumar said the physical market is witnessing prices as high as USD 145 per barrel.

"The market is pricing the physical tightness. Buyers are scrambling for supplies from wherever they can get the barrel," he added.

The disruption is not just limited to logistics but is also impacting production. Countries such as Iraq and Kuwait are unable to fully load and transport crude due to constraints in the Strait of Hormuz, leading to production cuts.

Additionally, damage to energy infrastructure in the region is compounding the problem. He noted that several facilities have been hit during the conflict, forcing producers to shut in output.

On the demand side, refiners are reacting to the supply crunch by either cutting runs or scrambling to secure barrels at higher costs. Kumar confirmed that panic buying and stockpiling are already being seen in the market.

"Buyers are trying to get hold of whatever supplies they can, but that is coming at a cost," he said.

Freight costs have surged sharply, with shipping expenses rising nearly 50 per cent, while refined product prices have almost doubled compared to pre-war levels, adding further pressure on economies.

Despite efforts, he also noted that alternative suppliers such as Russia are unlikely to fully bridge the gap. Kumar said Russian crude cannot replace Middle Eastern supply both in terms of volume and quality, as many Asian refineries are configured for lighter grades.

Looking ahead, Kumar cautioned that even if the geopolitical situation improves, oil prices are unlikely to return to pre-war levels anytime soon due to lingering logistical and infrastructure challenges.

The ongoing crisis is expected to have widespread implications globally, particularly for import-dependent economies, as higher oil prices could fuel inflation and impact economic growth.

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