Energy analysts are painting an alarming picture: crude could soar to $200 a barrel if the Strait of Hormuz remains closed indefinitely, a scenario that once seemed far-fetched but now appears disturbingly plausible.
The warning comes as President Trump considers winding down the U.S. conflict with Iran without securing the reopening of this critical chokepoint. About one-fifth of the world's oil and liquefied natural gas transit through the narrow waterway.
Oil prices have already climbed to near $120 a barrel. U.S. gasoline has jumped 35 percent since fighting erupted last month, topping $4 a gallon this week. Countries more dependent on Middle Eastern crude are experiencing worse, with fuel shortages already emerging.
Macquarie analysts assigned a 40 percent probability to oil reaching $200 if the conflict drags into June. Eurasia Group estimates a 55 percent chance the war lasts through May, with potential for prices above $150 if Iran damages oil infrastructure.
Jason Bordoff, founding executive director of Columbia University's Center on Global Energy Policy, said flatly:
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