SerpApi.Org
The dire prediction of $150 a barrel oil at the start of the Iran war never came to pass, leaving industry watchers much more circumspect with their price predictions now that hostilities have reignited. That said, record-setting prices aren’t out of the question, either.
Despite President Donald Trump’s latest threat on Tuesday to destroy an Iranian bridge or power plant whenever Iran “shoots at a ship in the Strait of Hormuz,” Brent crude futures were hovering around $94 a barrel as of midafternoon. That’s up nearly 30% since the war started, but also far below their March 9 peak of $119.50, which inspired the frothiest oil price forecasts.
Prices hitting $150—breaking the July 3, 2008, record of $146.08—would be the result of a “full regional war,” notes RBC Capital Markets’ head of global commodity strategy Helima Croft. While she says that isn’t her base case, “it isn’t a black swan either given the trend line over the past ten days.”
Hostilities in the region have escalated sharply with no end in sight. They include 11 consecutive days of strikes on Iran by the U.S., missile and drone attacks by Iran on oil tankers in the Strait of Hormuz and nearby U.S. military bases, as well as the threat by Iran-allied Houthis in Yemen to block the southern entrance to the Red Sea at the Bab al-Mandeb Strait through which Saudi Arabia exports much of its oil.
Croft isn’t the only one eyeing $150 a barrel. “If Hormuz flows remain minimal, that alone can increase the upside risk, and then if Bab al-Mandeb is materially impacted and with Russian exports now also potentially disrupted those risks increase even more, and $150 [a barrel] or even higher starts to become a possibility again,” TD Securities’ Commodities Strategy Director Ryan McKay said.
But $150 a barrel is more of a worst-case scenario than what is more broadly expected. TD Securities’ current forecast is for Brent futures to peak at $108 through the end of September and $105 for West Texas Intermediate futures, the U.S. benchmark. “Risks to supply have grown materially in recent days,” Bart Melek, the firm’s global head of commodity strategy, told Barron’s. By the end of 2026 into early 2027, the firm is eyeing prices in the $90 to $100 a barrel range, assuming modest flows through the Strait of Hormuz.
A variety of buffers kept oil from reaching $150 a barrel earlier this year, including large global inventories and the world’s largest importer, China, largely opting out of buying new oil altogether. But with global reserves continuing to fall—U. S. reserves are at their lowest since 1983—such cushions are wearing thin.
It’s also possible that rising oil prices could actually get Iran and the U.S. back to the negotiating table. “There is some level where oil prices become so high and so onerous that it will change behavior of both actors,” BCA Research’s Marko Papic said. The big question is when that will actually happen.
Write to Anita Hamilton at [email protected]