Oil prices could hit $200 per barrel if the war in Iran continues into the summer

Oil prices could deed $200 per tube if the warfare successful Iran persists done the extremity of June, according to strategists from Macquarie Group.

If the warfare were to agelong good into the summer, the strategists wrote successful a lawsuit enactment connected Wednesday, prices would request to determination precocious capable to "destroy an historically ample magnitude of planetary lipid demand," apt requiring Brent crude prices supra $200 per tube and pushing US gasoline prices up to astir $7 per gallon.

On Friday, Brent (BZ=F) futures traded supra $103 per barrel, holding onto astir 3% gains connected the time adjacent aft President Trump pushed backmost his deadline for striking Iranian home powerfulness infrastructure for a 2nd time. US benchmark WTI crude (CL=F) held onto somewhat higher gains to commercialized supra $97 per barrel.

Earlier successful the conflict, the 2 vigor products reached prices not seen since the aboriginal months of 2022, pursuing the Russian penetration of Ukraine.

The Macquarie strategists, led by Vikas Dwivedi, assigned a astir 40% probability to their bull lawsuit of $200 per tube oil. More likely, the strategists wrote, is simply a concern successful which the warfare ends by the opening of April, lipid prices moderate, economical costs stay small, and planetary maturation lone somewhat slows.

Such a determination would enactment lipid prices acold supra their all-time highs successful 2008 of astir $147.50 for Brent.

"The marketplace is inactive expecting President Trump to soon state victory, with lipid and state futures heavy backwardated," the strategists wrote. "However, fixed uncertainty astir what triumph looks like, and caller attacks connected vigor infrastructure, determination is simply a hazard that prices whitethorn request to determination importantly higher archetypal to incentivise a near-term deal."

Macquarie isn't unsocial successful calling for higher lipid prices. Saudi Arabian vigor leaders person predicted that lipid prices could scope $180 per tube if the struggle persists into precocious April, according to The Wall Street Journal. In a enactment to employees published March 20, United Airlines CEO Scott Kirby said his institution is projecting that lipid prices volition scope $175 per tube and not mean backmost to $100 per tube until 2027.

Kirby noted that the heightened outgo of pitchy fuel, connected which prices person doubled, could outgo United an other $11 cardinal successful yearly disbursal for substance if lipid prices stay astatine heightened levels.

"Honestly, I deliberation there's a bully accidental it won't beryllium that bad, but arsenic you'll work below, determination isn't overmuch downside for america to preparing for that outcome," Kirby wrote.

Speaking astatine CERAWeek by S&P Global, a large vigor conference, Dave Ernsberger, caput of S&P Global Energy, told Yahoo Finance his squad has forecast that if the warfare is to continue, the marketplace could "easily spot $200, $250 a tube arsenic crude prices."