Soleimani killed and oil markets .. Will prices rise to $ 100?

Analysts and experts said that a fifth of the world's oil production was affected as the region headed towards the brink of war in the wake of the killing of the Quds Force commander Qassem Soleimani.

Some also suggested that oil prices rise to record levels, which could reach around $ 100, according to Anatolia news agency.

Global worries about the escalation of geopolitical events in the Gulf region increased after Soleimani was killed in a US air strike last Friday.

And global crude oil prices were quickly affected after the US Department of Defense announced that Soleimani was killed.

And Brent futures rose more than 3.2% to the highest level in three and a half months at $ 69 a barrel last Friday.

According to observers, oil prices will maintain levels above $ 67 a barrel for Brent during the coming period, with tensions remaining in the region, amid the multiplicity of options that Tehran previously pursued before the US sanctions.

Supply anxiety
"It is natural that the escalating atmosphere, as a result of geopolitical tensions in the production areas, supports the state of anxiety over supplies in the oil market," oil expert Mohamed Al-Shatti told Anatolia.

Al-Shatti pointed out that the oil prices will remain high, and will interact with every threat to the movement of navigation, trade and transport of oil from various paths, including the Strait of Hormuz in the Persian Gulf, where almost 20% of the world's oil needs travel alongside natural gas.

Al-Shatti added that the killing of Soleimani was reinforced by the escalation of concerns about the course of events, especially in light of Iranian threats of a military response, which reinforces tensions over the safety of navigation in the Strait of Hormuz.

Al-Shatti added, "The current fears come from the escalation of the confrontation between the United States and Iran, and the effect of this on the increase in oil prices further after it rose initially in a preliminary reaction."

He considered that the geopolitical developments remain very important, especially as they occur in production areas that have huge reserves and levels of production that ensure the security of supplies and operate a safety valve in the markets, according to his expression.

Difficult effects
Global oil market analyst Ahmed Hassan Karam said that the effects will be difficult for the region, and will be reflected on oil prices if they are not contained quickly, because any military operations or political threats in the Gulf region affect the rise in oil prices.

Along with Iran, the Arab Gulf region produces around 23 million barrels of oil per day, constituting nearly 23% of the total global demand for crude, estimated at 100 million barrels per day.

Karam added that the trump card of Iran, which will be used quickly, is the closure of the Strait of Hormuz, through which a third of the world's oil production passes.

"Perhaps we will see record highs as a result, and we may see the prices of $ 100 a barrel again if such things happen."

The importance of the Strait of Hormuz
The Strait of Hormuz is one of the scenarios that Tehran may resort to as one of the economic response tools to the assassination of Soleimani, by disrupting oil supplies from the Gulf states to the world.

The average daily flow of oil in the strait was 21 million barrels per day in 2018, equivalent to 21% of the consumption of petroleum liquids globally, according to the US Energy Information Administration, making it the largest waterway in the world.

Since last May, American oil tankers and a spy plane have been attacked near the strait, which is causing the disruption of supplies through which high shipping costs and the rise of global energy prices.

Time and again, Iran has threatened to disrupt oil shipments through the Strait of Hormuz, causing shocking repercussions for India, China and dozens of other countries importing crude oil in the Middle East in large quantities.

Production disabled
The killing of Soleimani threatens the possibility of Shiite demonstrations in Iraq, and the disruption of oil production or export centers in the country classified as the second largest producer of crude oil in OPEC after Saudi Arabia, with an average of 4.6 million barrels per day.

John Lucca, director of development for Dubai-based company, Thanx Markets, said that the expansion of the US-Iranian conflict would hinder the supply chain in the region and further rise in prices to historical levels to resolve the outbreak of war between the two parties.

He added that an atmosphere of anticipation and anxiety controls investors over Iraq becoming the battleground between the United States and Iran. Iraq is the second largest oil producer in OPEC and exports about 3.4 million barrels per day of crude, mostly from the southern port of Basra.