Macquarie Warns: Oil Prices Could Soar to $200 if US-Iran Conflict Lasts Until June

On March 27, Macquarie Group stated that if the Iran conflict continues until June and the Strait of Hormuz remains closed, oil prices could reach a record $200 per barrel. Analysts, including Vikas Dwivedi, noted in their report that if the conflict extends into the second quarter, it would result in historically high prices. They outlined a 40% probability of this scenario occurring. The analysts indicated that the closure of the strait, due to the scale of disruption, ‘has led to a surge in crude oil and refined product prices.’ An alternative prediction with a 60% probability suggests that the conflict may end by the end of this month. Brent crude is expected to achieve a historic monthly gain in March as the conflict between the US, Israel, and Iran shakes the oil-rich Middle East. In this conflict, Tehran authorities have overseen and nearly completely blocked the Strait of Hormuz, severely restricting the flow of energy critical to the global economy. The analysts stated in their March 27 report that if the strait remains closed for an extended period, ‘prices will need to fluctuate to sufficiently high levels to destroy historically massive global oil demand.’ The timing of the strait’s reopening and the physical damage to energy infrastructure are key factors in assessing the long-term impact on commodities.