Standard Chartered forecasts more frequent sharp oil price spikes
Oil prices nearly reached $110 per barrel on Thursday amid the conflict in the Middle East. Standard Chartered analysts expect high volatility to persist and sharp price spikes to become more frequent, OilPrice reports. At 7:10 a.m. U.S. Eastern Time on Friday, Brent was trading at $103.58 per barrel, while WTI was slightly above $98.
Iran’s Islamic Revolutionary Guard Corps said it had attacked and significantly damaged eight oil tankers and two U.S. Navy destroyers in the Strait of Hormuz. U.S. Central Command denied these claims. Standard Chartered believes that sharp news-driven fluctuations in oil prices will continue in the third quarter, as there are few signs of diplomatic progress that could ease restrictions on exports through the Strait of Hormuz.
Tensions in the oil products market
The bank noted that the situation in the middle distillates market — diesel fuel, gasoil and jet fuel — remains particularly tense. It is affected by low inventories, limited spare capacity and logistical disruptions exacerbated by heat and drought.
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Standard Chartered expects diesel, gasoil and jet fuel to retain their price premium over gasoline. The bank also believes that in the event of several simultaneous disruptions, the market has increasingly less spare production capacity, inventory and logistical capability to respond. According to analysts, this makes price dynamics asymmetric: sharp increases may become more frequent and stronger, even if prices decline afterward. The bank forecasts the average oil price in 2027 at $77.50 per barrel.
Europe’s gas market
The price of natural gas in Europe exceeded €81 per MWh on Thursday, the highest level since December 2022. Gas stocks in European storage facilities stood at 66% of capacity — 12 percentage points lower than last year and at a 15-year low for this period. In Germany, stocks were estimated at 54%, and in the Netherlands at 48%.
Liquefied natural gas flows from the Persian Gulf remain significantly below pre-war levels. A tanker carrying Qatari LNG passed through the Strait of Hormuz to Pakistan on September 8, but Standard Chartered stressed that this does not yet indicate a stable recovery in exports. QatarEnergy extended force majeure on LNG deliveries to European and Asian buyers for October and November.
