Oil prices to hold steady until US elections, says Energy Outlook Advisors

Crude oil prices will hold in a wide but familiar range until the US elections, according to Anas Alhajji, Managing Partner at Energy Outlook Advisors. “So, we are looking into a status quo until the US elections, and the status quo means that current prices or the range of current prices, although the range is wide, is going to continue,” he said.

Brent will likely stay in the 80s until then, with the period after the elections dependent on policy direction under President Trump.

Alhajji also pushed back on demand forecasts from the International Energy Agency and the US Energy Information Administration. “We think that there will be a decline in oil demand, but the decline is limited to about 300,000 barrels a day,” he said, adding that IEA and EIA projections point to declines far larger than the data supports.

Alhajji said the bulk of current price volatility stems from the Black Sea rather than the Strait of Hormuz alone. Russian and Kazakh oil exports have been disrupted, tightening supply even as Hormuz-related security concerns persist.

He linked this shortfall directly to refining. Diesel production requires medium sour crude, supplies of which are constrained by both the Hormuz and Black Sea disruptions. Refinery margins across Asia are likely to stay elevated as a result, until Hormuz reopens fully and medium sour crude flows resume from both regions.

For India, which imports more than 80% of its oil needs, Alhajji pointed to the country’s ability to recover imports and rebuild inventories after the Hormuz disruption as a sign of resilience. But he said India’s strategic petroleum reserves remain too small relative to the size of its economy and its projected growth, and called for reserves of 100 to 200 million barrels.

He suggested India could invite Gulf states to fund and build this capacity. “This is a golden opportunity right now for India to ask the Gulf states to tell them, look, why you don’t come to India and invest in building strategic petroleum reserves because if Hormuz is closed again, you benefit and I benefit,” he said.

Alhajji said Energy Outlook Advisors’ outlook through 2050 shows continued growth in oil demand, with the pace slowing over time. He described the impact of electric vehicles (EVs) as limited, pointing to China’s fleet of 50 to 60 million EVs as an example where the effect on oil demand remains small.

He attributed the sharper near-term demand weakness to slowing economic growth across Asia, citing second-quarter declines of 6% in Japan, 12% in China, and around 14% in Pakistan and Bangladesh. India recorded the smallest decline at 1.1%, which Alhajji linked to continued access to discounted Russian crude, an option unavailable to countries facing sanctions-related restrictions.

For the full interview, watch the accompanying video

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