Iraqi economist Nabil Al-Marsoumi predicted on Friday that oil prices could surpass $200 per barrel if the war spreads to the Gulf states and Iran closes the Strait of Hormuz, preventing the daily flow of approximately 20 million barrels to global markets.
Al-Marsoumi gave two possible outcomes for the approaching “oil war.” The first scenario has Israel targeting Iran’s most important hubs for oil exports, specifically Kharg Island, which is where 90 percent of Iran’s oil exports pass. Prices for a barrel of Iranian oil would rise to around $82 as a result of this attack, which would remove 1.5 million barrels from the market. “This would also cut off the most important source of Iranian funding,” he added, however.
“In such a scenario, OPEC+ may step in and remove voluntary and mandatory production limits to guarantee sufficient oil supplies to make up for the loss of Iranian oil. He stated, “This intervention may bring prices back down to approximately $70 per barrel.”
Al-Marsoumi suggested the second scenario: “The war could extend to include oil pumping and export stations in the Gulf, which would negatively impact Gulf oil exports, especially from Saudi Arabia, and push prices above $100 per barrel.”
“Iran has previously stated that if it is prevented from exporting its oil, it would block oil shipments through the Strait of Hormuz,” the economic expert added. “If Iran closes the Strait, it would halt approximately 20 million barrels of global oil supplies daily, driving prices to $200 per barrel and negatively affecting gas shipments passing through the Strait.”
“An Israeli strike would likely target oil installations, especially Iranian refineries, which would take 300,000 to 400,000 barrels of Iranian exports off the market,” Al-Marsoumi added. Despite this, he stated that this would have “minimal impact on global oil prices, especially with Libyan oil returning to previous levels.”
