Oil prices could hit $100 this year if OPEC+ maintains cuts: Vitol CEO

Spot crude oil prices could hit $100 per barrel this year if OPEC+ maintains its production cuts and continues to withhold crude from the global markets, according to Russell Hardy, CEO of independent commodity trading group Vitol.

Brent crude futures have increased almost 20% since the start of the year, as fears of widening conflict in the Middle East disrupting supplies face growing expectations of robust economic fundamentals.

OPEC+ has also taken some 5mn barrels per day (bpd) of crude off the market under voluntary production cuts since late 2022 to help support oil prices as concerns over the pace of global economic growth dragged on demand forecasts.

"It's really a supply-constrained market but we've averaged about $83 per barrel so far this year, so $80 to $100 feels like a sensible range for the market given OPEC'S control of inventories around the world," Hardy told the FT Commodities Global Summit in Lausanne, as reported by S&P Global Commodity Insights.

On the demand side, Hardy said Vitol is expecting global growth of 1.9mn bpd this year, similar to 2023, with China, India and jet fuel from increased air travel continuing to underpin growth.

Predictions that oil prices will hit $100 per barrel this year have been growing of late, fuelled by escalating tensions between Israel and Iran and stronger-thanexpected demand data, the S&P Global Commodity Insights report said.

In a note on March 28, oil analysts at S&P Global Commodity Insights said they expect Dated Brent prices of around $90 per barrel on a monthly average basis in the second to third quarters but said there is an upside risk if OPEC+ holds on to its cuts.

"The risk for higher prices...has increased owing to the extension of production cuts, originally announced in November 2023 by the 'OPEC+ Six' — Iraq, the United Arab Emirates, Kuwait, Algeria, Kazakhstan and Oman.

Also, more damage to Russian oil infrastructure from Ukrainian drone attacks could tighten the global balance and push prices higher," oil analysts at S&P Global said, noting that Ukrainian drone attacks on Russian refineries posed another an upside risk to both crude and product prices.

Last week, OPEC+ said it would maintain its voluntary cuts until July. The cartel is expected to decide on its continued production cuts beyond then at its next full ministerial meeting scheduled for June 1.