Global oil markets are on edge after Iraq’s Foreign Minister Fuad Hussein issued a grave warning to his German counterpart, Johann Wedeful, stating that crude oil prices could skyrocket to $300 a barrel if military tensions in the Middle East escalate further and the Strait of Hormuz is closed.
This stark prediction comes after Israeli airstrikes hit Iranian targets early Friday, raising fears of a broader regional war that could disrupt vital oil shipping routes.
“If military operations intensify, inflation across Europe will surge, and exports from oil-rich nations like Iraq could face severe complications,” said Hussein. “We could see oil jump to between $200 and $300 a barrel.”
The Strait of Hormuz, a strategic chokepoint between the Persian Gulf and the Arabian Sea, is responsible for transporting about 20% of the world’s oil supply. Any disruption could pull five million barrels per day from global markets, devastating economies worldwide. Iran has already hinted at this possibility, with Revolutionary Guard commander Esmail Qousari stating that Tehran is “seriously considering” closing the strait.
Analysts are ringing the alarm as well. JPMorgan estimates oil could surge to $130 a barrel in a worst-case scenario, while others believe prices could surpass even $300 if a full blockade occurs.
Following the initial Israeli strikes, Brent crude spiked by 7%, reaching $74.23 a barrel on Friday. Though Iran’s main oil export facilities have yet to be directly targeted, experts caution that any retaliatory attacks or supply disruptions could send markets into chaos.
Russian senator Alexei Pushkov also weighed in, warning that any large-scale blockade in the Persian Gulf could cause a “massive spike” in oil prices due to halted tanker traffic and reduced global supply.
As geopolitical tensions rise, the world is bracing for a potential energy shock that could rival any in recent history.
