Geopolitical factors will keep oil prices high for 1-1.5 months

Alexey Belogoryev, Research and Development Director of the Institute for Energy and Finance, commented to the Prime news agency on the role of the geopolitical "premium" in the current rise in world oil prices.

"In general, the market is fundamentally dominated by a downward trend in prices. It is possible to contain it at the expense of the so-called geopolitical premium, this has happened more than once in modern history, but in this case it is unlikely that this deterrent effect will last more than a month and a half," the expert said.

"So far, all this looks like inflating a price bubble based on an overly emotional and therefore not quite critical assessment of geopolitical risks. How much more this bubble will be pumped up depends on the information occasions, that is, first of all, on the next steps of Israel and Iran. I would not rule out a short-term price increase to $ 85 per barrel of Brent, and with a strong escalation, even higher," Alexey Belogoryev added.

At the same time, he noted, any "bubble" sooner or later collapses, and this one, in his opinion, will be especially short-lived. Firstly, because both Iran and the United States clearly do not want to "get involved in a big regional war."

Secondly, any decrease in oil supply from Iran, for example, due to Israeli strikes on its oil infrastructure, can be quickly compensated by an increase in production in other OPEC+ countries.

Thirdly, according to Belogoryev's estimates, the price increase is associated not only with the Middle East crisis, but partly with the fear of short-term interruptions in oil production in the Gulf of Mexico due to Hurricane Milton. And another factor that pushed prices up in September, a sharp decline in production in Libya, almost stopped working: a political settlement was reached, and since October 3, production began to recover and has already exceeded 1 million barrels per day, in August it fell to 0.45 million at the usual level of 1.2 million.