OPIS Blog

Barron’s Energy Insider | In Partnership with OPIS | Video – October 7, 2024

Watch: Barron’s Energy Insider writer Laura Sanicola and Tom Kloza, OPIS global head of energy analysis, discuss what’s ahead for oil this week.

 

Barron's Energy Insider

Transcript:

LAURA SANICOLA: Hey there. I’m Laura Sanicola, and I author the Energy Insider newsletter at Barron’s. And I’m here today with my colleague, Tom Kloza, the global oil analyst for OPIS. And Tom and I are going to discuss Iran’s impact on the oil markets today. Thanks for being with me, Tom.

Now given that the US is in discussions with Israeli officials about a possible response to Iran’s missile attack, how much production is at risk here, and what’s the impact if supplies are disrupted?

TOM KLOZA: Well, I think there’s about one and a half million barrels a day of Iranian oil that gets exported. It may be that none of that is targeted, but the nuclear option, so to speak, for Israel would be to take out Kharg Island, which is where most of the crude oil and refined products exports are staged. That would be, as I said, metaphorically, the nuclear option or something that would really, perhaps lead to a fuel apocalypse like we saw in 2022.

SANICOLA: Now, of course, the OPEC+ cartel has about 180,000 barrels per day of crude oil that they want to bring on the market in December. How might what’s going on right now in the Middle East impact their decision-making and the effect of crude prices going forward this year?

KLOZA: Well, I think crude prices have restored a geopolitical premium this week, but it’s not clear whether that premium is warranted. OPEC+ met quietly. The joint ministerial meeting, took place, and they determined that they were still going to release some extra oil in December. So make no mistake about it. If you look out at the next 15 months, it’s very challenging for oil producers. 2025 almost certainly will see more oil supply than oil demand, and that is something that the industry has to contend with.

SANICOLA: Given all this, what price do you think we’re going to see WTI and Brent trade at at the start of 2025?

KLOZA: I think the 70s are appropriate for crude oil to start the year, and I think the 60s are probably appropriate for where it exits 2025. There’s very little scholarship that indicates that crude oil is not going to be in abundant supply in 2025.

We’re going to see more oil from Guyana, from Brazil, from the United States. And if we see the OPEC+ cartel restorations of crude oil, we’re going to see a lot of oil from multiple countries. So it is a very challenging environment, next year for oil prices.

SANICOLA: Great. Well, thank you so much for chatting with me this week, and we’ll see you next week. Bye. Thank you.

Tags: Crude oil, Energy Insider