- Oil could reach up to £118 ($150) per barrel amid conflict
- Strait of Hormuz tensions threaten global energy supply
- Markets brace for further losses as war drags on
Fears of a sharp oil price surge are building as the Middle East conflict shows little sign of easing. Analysts suggest Brent crude could climb as high as £102 ($130) per barrel, with short-term spikes potentially reaching around £118 ($150) if tensions continue to escalate.
The concern centres on the Strait of Hormuz, a critical route that carries about 20 per cent of the world’s oil and gas. Any prolonged disruption here is likely to push prices higher and unsettle global markets.
Neil Wilson, UK investor strategist at Saxo Bank, reportedly described the situation as an “escalatory doom loop”, warning that neither side appears willing to step back. He suggested both parties may believe increasing pressure will force the other to retreat, as quoted in a news report.
The warning follows a 48-hour ultimatum issued by US President Donald Trump on March 22, demanding that Iran reopen the strait or face potential strikes on its energy infrastructure.
Iran has responded with its own threats, indicating it could target US-linked energy assets across the region if such action is taken.
Markets on edge as risks build
The conflict has already started to shake energy markets. Brent crude had earlier climbed close to £95 ($120) per barrel on March 9, reflecting growing supply concerns.
Recent attacks have added to the uncertainty. Iran reportedly struck a major liquefied natural gas facility in Qatar, which authorities said reduced around 17 per cent of the country’s LNG capacity for the next three to five years.
This has raised fears of a broader supply shock, not just in oil but also in gas markets.
Wilson reportedly said investors may have underestimated the scale of the risk. He noted that markets often tend to look past geopolitical tensions, assuming they will be short-lived. However, the current situation may be different, with no clear path to de-escalation.
As trading resumes on March 23, there are expectations that equity markets could face further pressure, particularly if energy prices continue to rise and inflation concerns return.
