The Iran conflict has reopened one of the most consequential questions in global energy: how high can oil prices realistically go? The global oil market is facing a worst-case scenario as the US war with Iran engulfs the Middle East, with tanker traffic through the Strait of Hormuz at a standstill. Qatar shut down liquefied natural gas production after drone strikes on key facilities, and about a third of the world’s total seaborne oil exports normally passes through the Strait.
Analysts have mapped out a range of scenarios. Brent prices could break above $100 per barrel if Tehran pursues attacks on neighboring energy facilities, according to Bank of America. A conflict lasting more than three weeks could push Brent to $120 per barrel, JPMorgan analysts said. Deutsche Bank warned Brent could surge toward $200 per barrel if Iran enforced a full Strait closure using mines and anti-ship missiles.
The downside scenarios depend on how quickly alternatives can be mobilised. Saudi Arabia has contingency plans to route oil through overland pipelines, and OPEC+ has already announced a production increase of over 200,000 barrels per day. But analysts say those measures alone are unlikely to compensate for a prolonged Strait disruption, and markets are likely to remain volatile until there is greater clarity on the conflict’s trajectory and duration.
