Oil Could Hit $200 per Barrel if Iran Conflict Drags Into Summer

Oil prices could surge to as much as $200 per barrel if the conflict involving Iran extends into the summer, according to strategists from Macquarie Group.

The easing of tensions will allow oil prices to stabilize, potentially limit economic damage, and result in only modest slowing in global growth.

In a client note cited by Yahoo Finance, the analysts said prolonged disruption would require prices to rise high enough to significantly curb global demand. This scenario would likely push Brent crude above $200 per barrel and drive U.S. gasoline prices to around $7 per gallon.

Brent futures at one point were trading above $103 per barrel, maintaining gains of about 3 percent on the day. U.S. benchmark West Texas Intermediate (WTI) crude was also higher, trading above $97 per barrel.

Earlier in the conflict, both benchmarks climbed to levels not seen since the early months of 2022, following the onset of the Russia-Ukraine war.

The Macquarie team, led by Vikas Dwivedi, assigned a roughly 40 percent probability to this high-price scenario.

However, they said a more likely outcome is that tensions ease sooner, allowing oil prices to stabilize, limiting economic damage, and resulting in only modest slowing in global growth.

Even under that baseline scenario, prices could remain elevated compared with historical norms. For context, Brent crude reached a record high of about $147.50 per barrel in 2008.