"With renewed Middle East tensions, oil could reach $90–100 a barrel... Trigger for profit-taking"-NH

On the 16th, NH Investment & Securities recommended a 'neutral approach' to short-term oil investments, noting that the future price of Middle Eastern crude remains uncertain as regional tensions reignite.

Hwang Byung-jin, a researcher at the firm, stated, "Amid heightened geopolitical tensions in the Middle East, caused by Iran's retaliatory strike in response to Israel's airstrike on nuclear facilities, international oil prices have once again exceeded $70 per barrel." He explained, "The focus of international oil prices is less on the Israel-Iran armed conflict itself and more on the potential for supply disruptions through the Strait of Hormuz, which handles approximately 20% of the world's oil supply."

He continued, "If uncertainties over oil supply from major Middle Eastern exporters—beyond just Iranian crude—become prominent, short-term upward volatility in international oil prices is likely to persist." He further predicted, "Should tensions in the Middle East escalate to the point of a Strait of Hormuz blockade, thus intensifying supply uncertainty among major oil exporters, international oil prices could break through not only $80 per barrel, but also $90 and even $100 in the short term."

Accordingly, this is viewed as a possible trigger for profit-taking in the domestic stock market.

Na Jeong-hwan, another researcher at the firm, commented, "The Israel-Iran issue could reinforce risk-averse sentiment and shrink investor confidence due to soaring oil prices and reduced expectations for a Fed rate cut." He pointed out, "Given the recent rapid rise in the KOSPI, heightened geopolitical risk from the Middle East presents a short-term opportunity for profit-taking."

Jeong-Dong Noh, Hankyung.com journalist dong2@hankyung.com