IRAN ACTION MAY SEND OIL TO US$120 A BARREL, ASIA TO BEAR THE BRUNT -- RYSTAD ENERGY

KUALA LUMPUR, March 19 (Bernama) -- Oil prices could hit US$120 (US$1=RM3.93) per barrel if Iranian authorities act on their implied threat to strike on five facilities across Saudi Arabia, the United Arab Emirates (UAE) and Qatar, with Asia bearing the brunt given its dependence on Qatari volumes, according to an analyst.

“A successful strike would not only disrupt condensate refining but threaten the operational continuity of liquefied natural gas (LNG) trains supplying Europe, Japan, South Korea and China under long-term contracts," Rystad Energy senior vice-president Aditya Saraswat said in a statement today.

According to Aditya, Iranian authorities had warned that five facilities across Saudi Arabia, the UAE and Qatar “will be targeted in the coming hours”, while oil prices have gone above $110 per barrel.  

The facilities are Saudi Arabia’s SAMREF refinery and Jubail petrochemical complex, the UAE’s Al Hosn gasfield, and Qatar’s Ras Laffan refinery and Mesaieed petrochemical complex and holding company, he said.

Aditya said if statements from Iran’s semiofficial Tasnim news agency come to fruition, and facilities in Saudi Arabia, the UAE and Qatar are hit, at least 700,000 barrels per day of refined product capacity could be removed from global markets overnight, disrupting diesel, jet fuel and naphtha supply across the three countries.

“So far, Iran has largely followed through on its stated actions, which makes this a highly credible threat.

“Any disruption here would not only affect regional supply but ripple through global LNG markets, with Asia bearing the brunt given its dependence on Qatari volumes,” he said.

Aditya said Saudi Arabia has been hit by strikes, but loadings remain unaffected --  a critical factor for oil markets, as any disruption to key infrastructure such as the port of Yanbu could remove five million to six million barrels per day from the market, and potentially push oil prices to $150 per barrel or higher.

“To put the scale in context, the five facilities collectively account for roughly 20 per cent of global LNG trade, up to 10 per cent of Asia-Pacific naphtha imports, and more than six per cent of global polyethylene capacity concentrated in a geography with no short-term substitute,"”he added.

-- BERNAMA