LONDON (Reuters) - Brent crude futures could hit $200 a barrel if political unrest spreads into Saudi Arabia, Societe Generale (SOGN.PA) said on Monday.
North Sea Brent crude futures were trading about 60 cents higher at around $117 a barrel by 1404 GMT. U.S. crude was around $105.70.
Brent crude has been hovering just below the $119 level hit late in February, its highest price since the third quarter of 2008, as the unrest in Libya has cost the country a loss of about 1 million barrels of crude production per day out of its normal 1.6 million bpd output.
Societe Generale listed some scenarios that could have an impact on oil prices, with its most extreme scenario showing Brent prices sharply high.
“Geopolitical Scenario 3: Unrest spreads to Saudi Arabia and threatens Saudi crude exports and any remaining spare capacity. Brent price range of $150-$200 a barrel,” it said in its research note.
“In this most extreme, worst-case scenario for the oil markets, serious unrest spreads to Saudi Arabia. In this case, it does not really matter if Libya or any other producers are shut down or not. Saudi Arabia is OPEC’s biggest producer and the world’s biggest current holder of spare capacity,” the bank added.
Saudi Arabia is the world’s top exporter of crude oil, meeting about 10 percent of the global oil demand.
The kingdom has escaped major protests like those that toppled leaders in Egypt and Tunisia, but the wave of unrest has reached its neighbors Yemen, Bahrain, Jordan and Oman.
Saudi Arabia’s council of senior clerics issued a statement on Sunday forbidding public protests, which the rulers of the U.S. ally and key oil exporter fear could spread following demonstrations by minority Shi’ites.
Reporting by Ikuko Kurahone, editing by Jane Baird