Oil Prices Top $100 Again... This Time, the "Oil Route" Is Key [Click e-Market]

Prospect of prolonged high oil prices
OPEC export recovery offers a buffer
"Watch whether the recovery continues"

International oil prices have topped $100 again, fueling concerns that high prices could persist. It is a familiar pattern whenever tensions rise in the Middle East, but this time the route oil takes to reach markets has become just as important as when the war will end.

As of October 16, West Texas Intermediate (WTI) futures stood at $101.41 a barrel, while Brent crude reached $109.86. KB Securities cited the risk of a clash between Yemen's Houthi rebels and Saudi Arabia as a major factor behind the recent rise in oil prices. The concern is that attacks targeting Saudi Aramco's production and export facilities and ports could cause actual damage.

Oil prices do not move only when supply is cut off. Fears that less crude will be available in the future can also push prices higher. KB Securities is watching Saudi Arabia's Yanbu port. If even this alternative export hub, which ships crude without passing through the Strait of Hormuz, is hit, supply concerns could intensify further.

The end of the war remains uncertain. KB Securities sees the end of 2026 as an optimistic estimate for when the war could end, and the first half of 2027 as its base-case scenario. It also allows for the possibility that the war could last beyond the first half of 2027. The analysis says the trajectory of oil prices will depend on how negotiations and clashes unfold.

The problem is that prices could surge even if the war ends soon. If the United States steps up pressure on Iran after the November midterm elections and brings the war to an end by the end of 2026, tensions could rise first as the two sides move toward negotiations. Lee Sang-beom, a researcher at KB Securities, forecast, "In that case, international oil prices will rise sharply in November and December before stabilizing as the war ends." In other words, expectations of an end to the war will not immediately translate into cheaper oil.

KB Securities cited a scenario in which phased nuclear agreements and negotiations to end the war proceed amid the current stalemate, bringing the war to an end in the first half of 2027. In this scenario, it expects oil prices to remain high, at around $100 a barrel, until the war ends in 2027.

That does not mean supply conditions will continue to deteriorate. According to Bloomberg, crude oil exports from Organization of the Petroleum Exporting Countries (OPEC) members have recovered from a low in May, reaching 13 million barrels per day. That is about 78% of the average of 16.7 million barrels per day in 2025.

KB Securities says the recovery has been driven by the restoration of alternative export routes in Saudi Arabia and the United Arab Emirates (UAE). Exports from the two countries in September had risen to around 5% below their 2025 levels. By contrast, exports from Iran were about 85% below the previous year's level, the firm noted. Lee said, "Even as the war drags on, how much OPEC's exports and production continue to recover will determine future oil prices," adding, "If the recovery continues, it could partly ease the global crude inventory shortfall even if the war lasts into 2027."

This content was produced with the assistance of AI translation services.