Energy analysts and traders said Monday they would not be surprised if oil prices rose to $200 a barrel as the massive Middle East crisis drags on. The move comes as the U.S.-Israel-led war against Iran has effectively halted traffic in the strategic Strait of Hormuz in recent weeks, disrupting oil production and shipping in the region. The Strait of Hormuz is an important narrow maritime corridor connecting the Persian Gulf and the Gulf of Oman. Typically, about 20% of the world’s oil and gas passes through it. Iran vowed to continue blocking the waterway as a “means of putting pressure on its enemies” and issued a stark warning about how this would affect oil prices. According to Reuters, Iranian military command spokesman Ebrahim Zolfakari said on March 11: “Be prepared for oil prices to reach $200 a barrel. Because oil prices depend on regional security, and they destabilize regional security.” Greg Newman, group CEO of Onyx Capital Group, said on Monday that the fallout from the ongoing supply shock could push oil prices to even higher levels soon. “Brent is just one agency. We have hundreds of contracts that reflect all spot prices around the world. The benchmark in the Middle East… has just hit $150 a barrel,” Newman told CNBC’s Ben Boulos from the trading floor. “So it’s already there. Can Brent crude catch up from an investor perspective? That’s what we’re hoping for,” Newman said. “We’re almost in the $150 range, but I don’t think it’s at all ridiculous to (suggest) $200. That would be very fair given that we’re having a crisis every day right now that basically amounts to a supply outage,” he added. Brent crude oil futures (delivered in May), an international benchmark, were flat at $103.16 per barrel on Monday morning, flattened from previous gains. Meanwhile, U.S. West Texas Intermediate futures for April delivery fell 1.7% to $96.95, having topped $100 in early trading. Both contracts have surged more than 50% in the past month, reaching their highest level since 2022, as shipping traffic through the Strait of Hormuz has been severely disrupted. Brent closed above $100 last week for the first time in four years. US President Donald Trump on Sunday called for help from other countries to secure the Strait of Hormuz, saying the sea passage was in his country’s interests more than Washington’s. “The Strait of Hormuz actually exists for China and many other countries, so why do we maintain it? Why don’t they maintain it?” President Trump told reporters aboard Air Force One. “Before this conflict started, I thought things were looking good for markets this year and looking good for the global economy,” Chris Watling, global economist and chief market strategist at Longview Economics, told CNBC’s “Squawk Box Europe” on Monday. “The problem is, we’re in a binary situation right now. I wouldn’t be surprised if oil went to $200 or even $250, because when supply is short, commodity prices go parabolic,” Watling said. “So in that environment there would be serious damage to the global economy and a complete portfolio change,” he continued. “The important thing is, you’re on one end of the spectrum or the other. So what do you do with it? I think you basically have to be very nimble and you have to adjust your risk position very quickly. And of course there are some people who can’t do that. So it becomes very difficult.” Not everyone expects oil prices to reach dizzying highs of $200, with many analysts pointing out that energy markets appeared well-supplied before the conflict began on February 28. UBS strategists, for example, said they expect Brent crude oil prices to trade at $90 by the end of June, up from previous expectations of $65 for the same period, and between $67 and $85 by year-end. Meanwhile, Goldman Sachs analysts reportedly said late last week that they expect Brent oil prices to average more than $100 this month and fall to an average of $85 in April. However, Wall Street banks warned that prolonged disruptions to shipping through the Strait of Hormuz could lead to significant price increases in the coming weeks. Looking to the future, Sparta co-founder and CEO Felipe Elinck Schurman said oil traders should try to differentiate between short-term and medium-term price outlooks. “The oil market will react very quickly, depending on whether this situation continues or resolves quickly,” Schulman told CNBC’s “Squawk Box Europe” on Monday. “In the medium term, we should not expect prices to fall to their original levels immediately. As I said on the product side in particular, jet, gasoline, diesel, all petrochemicals will take many months to recover. So this situation will be long-term,” he added. Correction: UBS strategists said they expect Brent crude oil prices to trade between $67 and $85 by year-end. Previous versions had incorrect numbers.
