Brent Likely To Cool To $70 A Barrel By Next Year, Says Fereidun Fesharaki

Brent crude oil prices have recovered this week after an initial spike on Monday, following the unexpected attack on Israel's territory by the Hamas militant group.

Over the last few days, crude prices cooled off even as the war raged, with defence forces from Israel mounting an aggressive and violent counter-strike in the Gaza Strip.

The reason crude oil has cooled off is that the war has been limited to Israel and Hamas so far but this could change if Iran gets involved, Fereidun Fesharaki, chairman of FACTS Global Energy and an avid tracker of the Asia Pacific and Middle East energy markets, told BQ Prime.

"Bottom line, the fundamentals tell us the price of oil should be $85 per barrel. If Israelis bomb Iranian oil fields, we will go to $150 a barrel," Fesharaki said.

However, he expects that fundamentally, oil prices should remain between $85 and $90 a barrel. Next year, prices are likely to cool off further to $75 a barrel as demand slows down, he said.

"$100 (per barrel) would be hard to imagine without some massive external event," he said.