The high cost of oil reflects hopes of a strong recovery in demand at least as much as fears of a military conflict between the West and Iran. However, the price of a barrel of Brent probably still includes a premium of $5-10 for the possibility of more significant disruption to supplies from the Middle East. We expect this premium to fall over the coming months, adding to the downward pressure on oil prices from waning optimism about the global recovery.
Become a client to read more
This is premium content that requires an active Capital Economics subscription to view.
Already have an account?
You may already have access to this premium content as part of a paid subscription.
Sign in to read the content in full or get details of how you can access it
Register for free
Sign up for a free account to:
- Unlock additional content
- Register for Capital Economics events
- Receive email updates and economist-curated newsletters
- Request a free trial of our services