(News Bulletin 247) – The December contract on North Sea Brent crossed this threshold on Monday, driven by tensions in the Middle East.

As for several days, oil prices are increasing, driven by geopolitical risk. This Monday, the December contract on North Sea Brent returned to the symbolic mark of 80 dollars per barrel, a threshold which had not been crossed since August 27, according to data from investing.com.

The contract thus increased by 3.48% to 80.78 dollars per barrel shortly after the close of the Paris Stock Exchange while that of November on WTI listed in New York gained 3.5% to approach 77 dollars per barrel.

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Tensions that don’t subside

Black gold prices have been supported for almost a week by the renewed tensions in the Middle East, when Iran launched a massive ballistic attack against Israel on October 1. Since then, the Brent contract has regained nearly 13% or around $9 per barrel.

These events have led the market to fear an escalation which could disrupt oil production, and therefore supply. Last week, US President Joe Biden indicated that Israel was considering attacking Iran’s oil infrastructure.

“Investors have the feeling of an imminent response from Israel on Iran,” Jorge Leon of Rystad Energy told AFP.

According to data from the US Department of Energy, Iran produced 4 million barrels per day of oil in 2023, which represented about 4% of global production.

This Monday, Iran reiterated that it would respond “firmly” to any possible Israeli attack on its soil. Israel, for its part, commemorated this Monday the Hamas attack of October 7, 2023. The day before, Israeli President Benjamin Netanyahu had promised to defeat the “enemies” of the Hebrew state.

Several scenarios

“Assuming there is no major supply disruption (its central scenario, editor’s note), we continue to forecast that Brent will trade between $70 and $85, and we forecast an average price of $77 per barrel. for the fourth quarter of 2024 and $76 per barrel for 2025,” Goldman Sachs wrote in a note published Friday.

However, the establishment evokes two other scenarios. In the event that the conflict removes 1 million barrels per day of Iranian oil on a “persistent” basis, the bank estimates that Brent could reach around $85 by mid-2025, if OPEC+, Organization of the Petroleum Exporting Countries and its allies are gradually deciding to close the production gap. And around 95 dollars per barrel at the end of 2025 if OPEC+ does not act.

Second scenario: the case where the impact on Iranian oil production would be 2 million barrels per day but temporarily (two quarters). Brent prices would peak at around $90 per barrel in early 2025 but then decline to a range of $70 to $85 per barrel.

“It would not be surprising to see prices rise quickly beyond 85 dollars at the slightest intensification of the conflict,” said Stephen Innes, analyst at SPI Asset Management, quoted by AFP for whom the mark of 100 dollars is “far from impassable”.