Saudi Arabia Warns: Oil Prices Could Exceed $180 Per Barrel if Strait of Hormuz Disruptions Persist
News Summary
Editorial review conducted based on sources.
- Saudi Arabian officials estimate that if disruptions continue in the Strait of Hormuz until the end of April, oil prices could rise to as much as $180 per barrel.
- Attacks between Iran and Israel have been impacting energy hubs across the Gulf region, raising concerns that Saudi Arabia’s Yanbu port could also become a target.
- Qatar’s Ras Laffan LNG export facility, damaged in an Iranian attack, may remain closed for an extended period and could possibly not resume operations before 2026.
March 19, Kathmandu – Saudi Arabian officials have assessed that if the blockade at the Strait of Hormuz continues until the end of April, oil prices could reach $180 per barrel.
The Wall Street Journal, citing anonymous sources, reported this projection.
Since hostilities began with Iran on February 28, oil prices have experienced significant volatility. On Thursday, Brent crude briefly touched $119 per barrel before decreasing again.
Omar Karim, a foreign policy expert at the King Faisal Center for Research and Islamic Studies in Riyadh, told Al Jazeera that with ongoing conflict, oil prices could reach at least $150 per barrel.
“If these Red Sea terminals are attacked and any disruption occurs in the Red Sea, I think oil prices could exceed $150 per barrel,” Karim said.
He added, “Currently, this is the only viable route between Europe and Asia.”
Saudi Arabia continuously exports oil via Yanbu port on the Red Sea, which is over 1,000 kilometers away from the Gulf region.
Due to attacks between Iran and Israel affecting energy sources throughout the Gulf, Saudi officials warn that Yanbu port could also become a target.
Impact of the Ras Laffan Damage
Annie-Sophie Corbeau, an expert at the Center on Global Energy Policy in Paris, commented on Qatar’s Ras Laffan, the world’s largest liquefied natural gas (LNG) export facility, which was struck in an Iranian attack this week. It is currently assessing the required repair time.
“The full extent of the damage is not yet clear,” Corbeau said. She added, “Based on previous incidents at other LNG centers, repairs could take several months.”
She noted, “Previously, the Freeport LNG facility in Texas was closed for eight months following a major event in 2022.”
Earlier in September 2020, Norway’s Snøhvit LNG plant remained closed for one and a half years following a fire.
“In the worst-case scenario, Ras Laffan may not resume operations until 2026. This means LNG supply could stagnate at 2021 levels,” she explained.
She added this would be a five-year setback with significant global repercussions on gas prices and supply.
(Based on reports from Al Jazeera)
