🌩️Oil Could Reach $200 if Conflict Continues

🔥 Key Point
Analysts at Macquarie warn that Brent crude could surge to $200 per barrel if the Iran-related conflict continues through June and the Strait of Hormuz remains largely closed.

📌 Main Takeaways

1. Two Possible Scenarios
- 60% probability (base case):
- Tensions ease soon
- Oil prices fall from current ~$108
- Limited global economic impact

- 40% probability (risk case):
- Prolonged conflict + supply disruption
- Oil could spike above $200
- Potentially historic economic consequences

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2. Why Prices Could Spike
- Strait of Hormuz closure could halt ~13% of global oil supply
- This disruption would exceed the 1970s oil crises and Gulf Wars
- Strategic reserves (1.2B barrels) help but can only be released slowly

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3. Global Economic Impact
- Oil at $200 could:
- Push U.S. gasoline to ~$7 per gallon
- Slow global growth by ~1 percentage point
- Create stagflation (weak growth + high inflation)
- Pressure central banks, especially the U.S. Federal Reserve

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4. Government Responses
- Some countries (e.g., Japan, Italy) already subsidizing energy costs
- Governments may intervene more aggressively if prices spike

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5. Outlook
Macquarie still expects a deal to be reached, given that 15% of global supply is at risk and the economic incentives to stabilize the region are enormous.

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