Media365
Global crude oil prices could once again surge to the highs seen earlier this year if geopolitical tensions between the United States and Iran continue to intensify, according to Sparta Commodities’ Senior Oil Market Analyst June Goh. However, she believes Asian refiners are far better positioned to manage supply disruptions than they were during the initial phase of the conflict.
Speaking to ANI in Singapore, Goh said Brent crude’s recent rally back to around $80 per barrel could extend further if the geopolitical situation worsens.
“The sustainability of the rally depends on whether tensions continue to escalate,” she said, adding that the latest exchange of strikes between the US and Iran, coupled with Washington’s decision to withdraw the 60-day waiver on Iranian oil sales, signals a fresh escalation in the conflict.
According to Goh, unless there is a renewed diplomatic breakthrough or a change in policy from either Washington or Tehran, the current uncertainty is likely to persist.
Brent crude could revisit early-2026 highs
While refraining from giving a specific price target, Goh said the market has witnessed a similar situation before.
“We have been here before. It’s almost déjà vu in terms of the type of attacks we are seeing. It’s like going back to the beginning of the conflict earlier this year,” she said.
She recalled that Brent crude had climbed close to $110 per barrel during the earlier phase of the crisis before retreating, warning that similar price levels cannot be ruled out if geopolitical tensions continue to intensify.
Asian refiners diversify crude sourcing
Despite rising geopolitical risks, Goh said refiners across Asia have significantly strengthened their supply chains by diversifying crude procurement.
She noted that refiners have increased imports from countries including Canada, Venezuela and Mexico, reducing their dependence on Middle Eastern crude supplies. Strategic petroleum reserves have also helped cushion supply disruptions.
“Compared to the start of the conflict, Asian refiners have been very successful in diversifying crude sourcing,” she said.
As a result, refiners are unlikely to slash refinery utilisation to the severe levels witnessed during the early stages of the crisis.
According to Goh, refinery run rates, which had previously dropped to around 50-60 per cent, may now moderate only from about 80 per cent to nearly 70 per cent, indicating far greater operational resilience.
Diesel and gasoline prices remain under pressure
While crude supply management has improved, Goh warned that refined fuel markets continue to face significant challenges.
She said diesel and gasoline prices are rising faster than crude oil because inventories remain low, particularly in Europe and the United States, while refining capacity is insufficient to meet strong seasonal demand.
“The result will be higher end-product costs for diesel and motor gasoline across many markets,” she said.
OPEC+ output hike may not fully reach markets
Goh also cautioned that the recent production increase announced by OPEC+ may not translate into actual market supplies if security risks continue to disrupt shipping through the Strait of Hormuz.
She said tanker operators remain cautious about operating in the region amid heightened geopolitical uncertainty, limiting the movement of crude despite higher production targets.
Higher oil prices could add to India’s inflation risks
Commenting on the implications for India, Goh said sustained high crude prices, combined with elevated freight costs, would increase the landed cost of crude imports.
This, she said, could add to inflationary pressures if global oil prices remain elevated for an extended period, posing fresh challenges for one of the world’s largest crude-importing nations.
