KUALA LUMPUR: The United States-Iran conflict could result in Brent crude prices posting a "knee-jerk” move of US$15-US$20 per barrel (bbl) (US$1=RM3.89) from the latest close, potentially lifting it towards the US$90 bbl level, said Public Investment Bank Bhd (Public IB).
In a note today, Public IB said that in a more severe scenario involving sustained interference with transit through the Strait of Hormuz, prices could temporarily trade in the US$100-US$110 bbl range as markets price in the risk of physical disruption.
"That said, we view the current spike as largely event-driven. While OPEC+ has announced a 206,000 barrels per day output increase following a three-month pause in production hikes, the increment is insufficient to offset a full-scale disruption but would re-anchor prices once tensions ease and flows normalise.
"Over the medium term, assuming de-escalation, Brent could retrace towards a US$70-US$75 bbl equilibrium, implying a modest upward revision from our prior US$60 bbl 2026 assumption rather than a structural shift,” it said.
It added that major US and Israeli combat operations against Iran have reintroduced a geopolitical risk premium into oil prices.
"While Tehran has not issued a formal closure notice, tanker congestion near the Strait of Hormuz, reportedly triggered by a radio broadcast, attributed to Iran's Islamic Revolutionary Guard Corps announcing a transit ban, suggests that flows are practically shut in, as vessel movements pause amid elevated war-risk conditions.
"This has created immediate logistical bottlenecks and heightened short-term supply risk,” it said.
Meanwhile, Maybank Investment Bank Bhd, in a separate note, said sentiment on oil prices tends to be boosted by "war premiums” but typically does not sustain unless tensions are prolonged.
"We note that Iran produces about 3.0 per cent of global crude and condensates, (making it) the third-largest producer in OPEC.
"We note, however, that OPEC+ has agreed to a modest oil output boost even as the situation in Iran disrupts shipments. This should cushion supply disruption. Our oil price forecast for 2026 is US$65 bbl,” it said.
Maybank said US-Israeli attacks on Iran have escalated and could cause second-order impacts on Malaysian equities.
"Based on our preliminary assessment, the impact appears limited across selected stocks, though sentiment could trigger a negative market reaction, as this could be seen as a black swan event should the situation deteriorate.
"Nevertheless, we remain focused on domestic-centric sectors and stocks, led by banks, consumer, construction, healthcare and renewable energy,” it added. - Bernama
