Kunal Shah predicts a modest 8% to 10% price correction for crude oil despite ongoing disruptions in the Strait of Hormuz [1].
This forecast comes as geopolitical instability in the Middle East continues to reshape global energy and metal markets. The potential for supply shocks in one of the world's most critical maritime chokepoints creates a volatile environment for investors and national economies.
Shah, the vice president and head of commodities research at Nirmal Bang Securities, said these market shifts in an interview with Manisha Gupta [1]. He said that while demand worries persist, the correction in crude oil prices may be limited to a range of 8% to 10% [1].
While the energy sector faces uncertainty, Shah expressed a bullish outlook for precious metals. He said gold and silver are strong performers amid the current war-risk environment [1]. The shift toward safe-haven assets often accelerates when maritime trade routes are threatened, a trend currently visible in the metals market.
Recent data indicates that U.S. crude oil exports have surged to record levels as tankers flock to the Gulf Coast [2]. This increase in U.S. supply may act as a counterbalance to the disruptions occurring in the Middle East, potentially preventing a more drastic spike or crash in global pricing.
Shah's analysis suggests that the intersection of geopolitical risk and supply chain diversification is creating a bifurcated commodity market. While oil remains sensitive to regional conflict, metals are benefiting from the resulting flight to safety [1].
“Crude oil may see only an 8% to 10% price correction despite demand worries.”
The contrast between a projected oil correction and a metals boom suggests that markets are pricing in a 'risk-off' sentiment. By forecasting a limited correction for oil despite supply disruptions, Shah implies that increased U.S. production and existing demand headwinds are offsetting the geopolitical premium typically associated with the Strait of Hormuz.
