World Bank cautioned on Monday that an escalation of the conflict in the Middle East could lift oil prices to a range of $93 to $102 a barrel in the fourth quarter of the year and under a "small disruption" scenario.
However, according to the Commodity Market Developments and Outlook report, under a "medium disruption" scenario, similar to the Iraq war in 2003, prices would rise by 21% to 35% initially, taking them to between $109 and $121 a barrel. Meanwhile, a "large disruption" scenario, comparable to the Yom Kippur War of 1973, could increase prices to between $140 and $157 a barrel.
"Independent of these risks, oil prices could ease, prompted by a decline in the demand from China, which could unfold as part of a broader slowdown in global economic activity. Oil prices could also rise if Saudi Arabia and Russia extend their voluntary cuts into 2024 or if U.S. shale production stalls starting in 2024," the report added.
