As the Middle East crisis escalates, if the near-closure of the Strait of Hormuz continues for the next six to eight weeks, crude oil prices could rise to $150 or $200 per barrel. The disruption is a result of the ongoing war between the US, Israel and Iran, which has already prompted Persian Gulf producers to cut millions of barrels of daily supply.According to energy-market consultancy FGE NexantECA, the impact on global oil markets could be huge. “Every week, 100 million barrels of oil are not going in, and every month, 400 million barrels of oil are not going in,” Chairman Emeritus Feridun Fesharki told Bloomberg on Tuesday. “So, within a short period of time, this loss to the market will be very significant,” he said. Fesharaki highlighted that the physical reality of supply disruptions will determine oil prices rather than political statements.“The market will crash and prices will go up. It doesn’t matter what the President says on the political front,” he said. His statement has come when US President Donald Trump has already suggested the possibility of ending the conflict. Oil prices have already risen sharply this month amid the conflict, with Brent crude climbing above $110 a barrel and US West Texas Intermediate (WTI) crude trading above $100. Brent crude rose $2.26, or about 2 percent, to $115.04 a barrel in early trading, after hitting its highest level since March 19 in the previous session. U.S. WTI crude rose $3.10, or about 3 percent, at $105.96 a barrel, its highest level since March 9.Analysts have warned that if the Strait of Hormuz remains effectively closed, the global oil market could face further shocks, potentially pushing prices even higher.
