Global oil market shock from Iran war may last until September, expert warns

Oil and gas prices could remain elevated until at least September even if the Strait of Hormuz reopens soon, energy expert Bob McNally has warned.

Speaking on ABC News’ This Week, the Rapidan Energy president said global oil markets are beginning to lose the buffers that helped limit the impact of disruptions earlier this year.

“The shock absorbers that the global oil market has benefited from in March and April and May are starting to wear off,” McNally said.

One of those buffers is the US strategic petroleum reserve, which has continued to decline during the ongoing disruption linked to the Iran war.

According to the Energy Information Administration, reserves dropped by another 7.9 million barrels between May 29 and June 5.

Uncertainty also remains over a possible agreement between the US and Iran, although President Donald Trump has suggested a deal could be finalised soon.

McNally warned that if negotiations fail and tensions continue, oil prices could surge into the “mid-$100 range”, while US petrol prices could rise to $5 per gallon.

The national average petrol price stood at $4.07 per gallon on Sunday, according to AAA.

Brent crude settled at $82.25 a barrel on Friday, while US crude closed at $84.29.