Brent could reach $120 a barrel without a geopolitical resolution, ETO Markets says

what happened

Brent could climb as high as $120 a barrel if geopolitical tensions remain unresolved, Jonathan Barratt, Chief Investment Officer at ETO Markets, warned, according to TradingView. He said persistent energy inflation could keep central banks on a tighter policy path. Supply risks remain elevated, with developments involving the Houthi rebels and Saudi Arabia adding uncertainty, and he expects crude to stay high through the current quarter unless the geopolitical picture clearly improves.

Barratt said Brent is approaching a key technical level, and a break above $111.50 a barrel would likely trigger another leg higher. He identified refining margins, especially for diesel, as the main route for the next wave of energy inflation. Diesel crack spreads have eased from recent highs but remain above historical averages heading into the Northern Hemisphere winter, when heating oil demand could keep margins elevated.

Barratt added that central banks are likely to keep prioritising inflation control even if higher borrowing costs weigh on growth. Bond yields have come off recent highs, but he believes policymakers are ready to tighten further if inflation persists.

why it matters

For markets, the link between oil and rates is the key point: expensive energy feeds inflation and raises the odds of further rate hikes, which pressures bonds and rate-sensitive stocks. The $120 scenario depends on geopolitics, so diesel spreads and the $111.50 level are the signals to watch.

market impact

Oil and diesel: geopolitical risk and refining margins push Brent higher; bonds: rate-hike risk weighs on prices

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