RISK OF WEST ASIA ESCALATION MAY PUSH GLOBAL OIL PRICES HIGHER -- RYSTAD ENERGY

KUALA LUMPUR, March 31 (Bernama) -- Global oil prices could remain elevated if the West Asia conflict escalates further in the absence of a ceasefire, independent research and energy intelligence company Rystad Energy said today.

Chief executive officer Jarand Rystad said such a scenario will require demand destruction of up to 10 million barrels per day, comparable to the contraction seen during the COVID-19 pandemic.

Nevertheless, he stressed that this is not the base case, noting that a ceasefire remains the more likely outcome as prolonged escalation will be detrimental to all parties involved.

“It is less likely that (high oil price) will happen if we have a ceasefire because everybody is losing. Maybe Iran will gain control over the Strait of Hormuz so it can allow passage for friendly nations and charge fees for other vessels.

"But that is also a situation in which Iran will be the winning nation in this conflict. This is very hard for the United States to live with. That is why it is a big uncertainty what will happen," he told reporters when asked about second quarter 2026 oil price projections on the sidelines of the Offshore Technology Conference Asia (March 31-Apr 2) here today.

For background, oil prices tend to swing sharply between risk and reality during geopolitical crises. Price surged to about US$144-US$145 per barrel in July 2008 before collapsing to around US$30 by year-end amid the global financial crisis. It again fell below US$20 in March-April 2020 during the COVID-19 pandemic due to a severe demand shock and supply glut.

Brent crude oil surged again to an intraday high of US$119.50 per barrel on March 9, 2026, as a direct result of the West Asia conflict on Feb 28 and the subsequent closure of the Strait of Hormuz.

Earlier, Rystad Energy released its new white paper, “Advancing Offshore Energy Responsibly in Asia".

According to the report, global energy demand is projected to increase by approximately 15 per cent over the next 15 years, requiring significant investment across both conventional and low-carbon energy sources.

To support a pathway aligned with global climate goals, the report noted that total global energy investment may need to exceed US$5 trillion annually by 2045.

The white paper also highlights offshore energy as a strategic pillar of Asia’s future energy mix.

It said regional offshore energy investment is expected to average around US$150 billion annually through 2035, supporting both continued oil and gas development and the expansion of offshore clean energy technologies.

The white paper said offshore wind, carbon capture and storage, and floating solar are expected to play an increasingly important role in the region’s energy transition, alongside Asia’s strong manufacturing capabilities in renewable energy supply chains.

-- BERNAMA