Cathie Wood-led ARK Invest Says Oil Could Crash to $30-$35 Once Strait of Hormuz Reopens As Trump Touts Positive Iran Talks
Cathie Wood -led investment firm ARK Invest expects oil prices to drop significantly despite uncertainty over the Strait of Hormuz and U.S.-Iran tensions, citing falling demand for oil as transportation transitions to the power grid. Oil Prices Could Drop to $30-$35 Per Barrel in the Future In an investor release by ARK Invest on Tuesday, the firm pointed to recent International Energy Agency (IEA) projections showing global production dropping 5.7 million barrels per day (mbd) to 100.7 mbd, alongside a 2.5 mbd drop in global demand, the firm said. Read Also: Chris Wright Fires Back at Gavin Newsom Over California’s ‘100% Clean Energy’ Claim—‘More Than 70%’ Still Comes From Oil and Gas ARK said that the price spike triggered by the Iran War has generated both “supply bottlenecks” and a decline in demand for oil, with electric vehicles “among the prime beneficiaries” of the fall. The firm pointed to 1986, when rising Organization of the Petroleum Exporting Countries (OPEC) quota cheating prompted Saudi Arabia to dramatically increase production, sending oil prices down about 60%, from roughly $23 to $9 per barrel. It then said Iraq, Nigeria and Kazakhstan are currently cheating on t
-Iran tensions, citing falling demand for oil as transportation transitions to the power grid. 5 mbd drop in global demand, the firm said. Read Also: Chris Wright Fires Back at Gavin Newsom Over California’s ‘100% Clean Energy’ Claim—‘More Than 70%’ Still Comes From Oil and Gas ARK said that the price spike triggered by the Iran War has generated both “supply bottlenecks” and a decline in demand for oil, with electric vehicles “among the prime beneficiaries” of the fall.
The firm pointed to 1986, when rising Organization of the Petroleum Exporting Countries (OPEC) quota cheating prompted Saudi Arabia to dramatically increase production, sending oil prices down about 60%, from roughly $23 to $9 per barrel. It then said Iraq, Nigeria and Kazakhstan are currently cheating on their quotas. 1 mbd in June, muting the price impact despite the Strait of Hormuz crisis after exiting the OPEC group. “During the next few years, we would not be surprised to see the oil price drop back toward ~$30-35 per barrel,” ARK said.
Transitioning to Electric Propulsion Amid the decline in oil, countries like the UAE were betting on natural gas, as well as nuclear power, hydro and solar energy, according to the note. ARK then said that the country could be betting on these sources to power the battery tech driving electric robotaxis like Alphabet Inc. ‘s (NASDAQ: GOOGL ) (NASDAQ: GOOG ) Waymo and Tesla Inc. (NASDAQ: TSLA ) Cybercab, autonomous trucks, drones, flying taxis, and robots.
Read Also: Trump Backs Diesel Export Ban, But Analyst Says Price Declines Likely Won’t Spread Beyond Gulf States: ‘Really Nervous’ “In other words, transportation—accounting for ~57% of global oil demand—may be transitioning to the grid,” ARK said. The firm suggested that oil reserve values may have peaked in 2008 at roughly $145 per barrel. 4744/gallon. 5217/gallon.
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General Assembly. Read Also: Iran Hits Back at Trump Over Soaring Fuel Prices — Says Blaming Tehran Is a Symptom of ‘The March of Folly’ Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by a editor. Check out more of Future Of Mobility coverage by following this link. Photo courtesy: Shutterstock