Crude Could Hit $157/b in Worst Case Israel-Hamas War: World Bank

Oil Prices could climb to $157/b in the short-term if escalation of the conflict between Israel and Hamas causes a large supply disruption, the World Bank said in its commodity markets outlook.

• In their worst-case scenario, the crisis descends into a regional conflict that sharply disrupts oil supply. global supply would fall by 6-8m b/d – around 6-8% of 2023 supply), akin to the fall in supply during the 1973 Arab oil embargo.
• “Under this scenario, oil prices would initially increase by 56-75% ($50-$67/b) above the 2023 Q4 baseline,” the World Bank said.
• Oil markets are estimated to average $90/b in its Q4 2023 baseline forecast.
• However, this was one of three scenarios forecasted, with a medium disruption scenario pushing up prices by $19-$31/b above the baseline, while a small disruption scenario boosts prices by $3-$12/b above the baseline.