The escalating war between Israel and Iran has triggered surge in oil prices raising concerns over how much further prices might climb.
Analysts fear that the conflict could disrupt Iran’s oil exports or wider Middle East crude flows. Oil markets remain on edge and future prices will largely depend on the trajectory of the crisis.
Analysts at Deutsche Bank believe Brent crude could hit $120 a barrel if the conflict escalates and disrupts regional oil trade, particularly through the Strait of Hormuz — a key chokepoint for global energy shipments. Such a scenario would surpass even the highs reached during the early days of the Ukraine war.
Still, Deutsche Bank says this worst-case scenario is unlikely. Markets may already have priced in some disruption to Iranian oil exports, meaning prices could stabilise around current levels.
Rystad Energy echoed this view, suggesting the involvement of the US in trying to contain the conflict could cap prices below $80 a barrel. A brokered calm would likely ease market tensions and prevent a further spike.
Despite the market’s relatively muted reaction, attention remains fixed on the Strait of Hormuz — a 38-km-wide passage south of Iran through which around 20% of the world’s oil and LNG flows.
Iran, which produced 3.4 million barrels of oil a day in May and exported about half of that, has previously threatened to close the strait. While the risk remains low, oil traders remain alert to any signs of disruption.
Maritime activity in the Gulf continues, but tankers bound for Iran are maintaining a greater distance from port facilities. The Joint Maritime Information Centre reported that the strait remains open but warned of a significant threat to shipping, citing electronic interference traced to Iran’s Bandar Abbas port.
The UK Maritime Trade Operations (UKMTO) said it had received multiple reports of interference affecting vessels’ automated position reporting systems.
Any impact from higher oil prices would likely be felt first at the petrol pump and in gas bills — although the effects may take time to appear.
