Elevated U.S.-Iran tensions will most likely result in an unplanned oil supply shortage in the Middle East, energy analysts told CNBC.
Analysts at Eurasia Group said an almost $10 price jump in Brent futures since the start of December highlighted a "significant increase in the geopolitical oil price premium" after the death of Soleimani last week.
As a result, the political risk consultancy said its base case oil price for 2020 is a range of $65 to $75 a barrel, "with risks to the upside." "With Tehran promising retaliation for the U.S. strike and Washington also threatening more attacks, there is an elevated likelihood of substantial oil supply disruptions in the Middle East and resulting price spikes," analysts at Eurasia Group said in a research note published Monday.
"While an intensification to all-out war is unlikely, further lethal action between U.S. and Iranian forces and attacks against energy infrastructure are probable and will keep markets on edge."Reza Amanat, deputy editor of crude markets at Argus Media, told CNBC's "Capital Connection" Tuesday that Brent crude futures were likely to average $64 a barrel this year.
"It is very difficult to look past this geopolitical tension that has built up now. It is a serious escalation," he said.
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