Oil Could Hit $200 a Barrel if Iran War Drags Into Summer
AOL.com reported Tuesday that strategists at Macquarie Group believe Brent crude prices could surge above $200 per barrel if the ongoing conflict involving Iran stretches well into summer. The warning underscores how deeply the disruption to Middle East energy flows is rattling commodity markets worldwide.
$200 Oil and a $7 Gas Pump
Macquarie’s energy team, led by strategist Vikas Dwivedi, outlined the scenario in a client note. A prolonged war, they argued, would force prices high enough to eliminate a historically large volume of global oil demand. That kind of demand destruction would likely push Brent past its all-time record of roughly $147.50, set in 2008, and send U.S. retail gasoline toward approximately $7 per gallon. The team assigned a roughly 40% probability to that bull-case outcome. Their base case remains more benign, with hostilities ending earlier and only modest drag on global growth.
Airlines and Energy Conferences Sound the Alarm
Macquarie is not alone in its concern. United Airlines CEO Scott Kirby warned employees in a late-March memo that his carrier was projecting oil at $175 per barrel, with no return to $100 until 2027 at the earliest. A doubling in jet fuel costs, he noted, could add roughly $11 billion to United’s annual fuel bill. Separately, at the CERAWeek by S&P Global energy conference, Dave Ernsberger, head of S&P Global Energy, told reporters that if the war continued, prices of $200 to $250 per barrel were easily achievable. He stressed that markets had not yet absorbed the full economic impact of losing roughly one-fifth of global energy supply.
Background: How the Strait of Hormuz Became the Chokepoint
The current crisis traces back to late February, when a joint U.S.-Israeli military operation against Iran began. Maritime traffic through the Strait of Hormuz, the narrow waterway that carries around 20% of the world’s oil and gas, largely ground to a halt shortly after. Earlier in the conflict, both Brent and WTI crude reached levels not seen since early 2022, the period immediately following Russia’s invasion of Ukraine. At the time of the AOL.com report, Brent was trading above $103 per barrel and WTI above $97, even after President Trump pushed back a deadline concerning Iranian infrastructure targets.
What Comes Next for Energy Markets
The trajectory of oil prices now depends almost entirely on how long the conflict runs. A swift resolution could keep prices in check. Each additional week of disruption, however, increases the likelihood that energy markets approach the extreme scenarios Macquarie and others have outlined. Consumers and corporations with heavy fuel exposure face mounting uncertainty heading into the summer driving and flying season.
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