Stories
Why Crude Oil Prices May Remain Near $100 Despite Geopolitical Shifts
- •Crude oil prices are expected to stay around $100 per barrel ahead of the US elections due to elevated freight costs and global supply flow disruptions.
- •X-Analysts CEO Mukesh Sahdev highlights that shipping disruptions and sanctions on vessels have become primary drivers of oil prices, replacing political headlines.
- •Current freight rates are four to five times higher than normal, reducing global oil trade efficiency and keeping geopolitical risk premiums elevated.
- •Dark trade involving ship-to-ship transfers has risen to 8 to 9 million barrels per day, delaying crude deliveries and keeping vessels occupied.
- •Beyond 2026, prices could average in the $80 range if supply surpluses materialize, though refining constraints and transportation bottlenecks may keep prices higher.
Key Questions Answered
Crude oil prices are expected to stay around $100 per barrel due to elevated freight costs, shipping sanctions, and transport disruptions that hinder the balancing of supply and demand. Additionally, tightening market conditions and the expansion of ship-to-ship dark trade in the Gulf are keeping delivery times prolonged.
Freight rates are currently four to five times higher than normal due to sanctions on shipping entities and ongoing transport disruptions. These inflated shipping expenses make global oil trade less efficient, delay crude deliveries, and maintain an elevated geopolitical risk premium.
Looking beyond 2026, crude prices could average in the $80 per barrel range if an expected supply surplus materialises. However, ongoing refining constraints, transportation bottlenecks, and damage to Russian refineries are expected to keep prices higher than general market forecasts.
