Iran Warns Oil Could Hit $200 a Barrel as Attacks Escalate in Strait of Hormuz
Oil prices jumped again on Tuesday as tensions in the Middle East escalated, raising fresh concerns about global energy supply. The spike comes after Iran intensified attacks on key energy infrastructure and warned that the vital Strait of Hormuz may not return to normal operations anytime soon.
Why Oil Prices Are Rising
Global benchmark Brent crude rose about 3% to around $103 per barrel, while US benchmark WTI crude climbed nearly 3.7% to about $97. Earlier in the day, both had surged even higher.
This increase is largely driven by fears of supply disruption. The Strait of Hormuz is one of the world’s most critical oil routes, carrying nearly 20% of global oil and gas supplies. Any threat to this route quickly impacts prices worldwide.
Impact on Fuel Prices
In the United States, gasoline prices are already reflecting the pressure. The national average rose to $3.79 per gallon, the highest level since October 2023, according to the American Automobile Association.
Iran’s Warning Adds to Concerns
Iranian parliamentary speaker Mohammad Baqer Qalibaf said the Strait of Hormuz “cannot be the same as before,” citing ongoing US and Israeli military presence in the region. He also warned that security in the area has significantly deteriorated.
Attacks on Energy Infrastructure
Recent attacks have heightened fears of prolonged disruption:
- The United Arab Emirates halted operations at its Shah natural gas field after a drone strike.
- A fire broke out at the major oil port of Fujairah following another attack.
- An oil field in Iraq was also targeted.
- A tanker near Fujairah was hit by an unidentified projectile.
Since late February, there have been more than a dozen attacks on ships in and around the Persian Gulf.
Geopolitical Tensions Escalate
The situation intensified further after Israel claimed it had killed senior Iranian security figure Ali Larijani. Iran has not yet confirmed this.
Meanwhile, former US President Donald Trump urged allies to help reopen the Strait, warning of serious consequences if action isn’t taken. However, European leaders remain cautious.
Officials from the European Union have made it clear they want to avoid deeper involvement. Diplomat Kaja Kallas stated that Europe does not want an “open-ended war,” even though its economic interests are at risk.
UK Prime Minister Keir Starmer said Britain is working with allies to restore safe shipping routes but emphasized that the UK will not be drawn into a wider conflict.
Can Oil Supplies Stabilize?
The International Energy Agency has stepped in, announcing that member countries will release over 400 million barrels of emergency oil reserves to stabilize markets.
While this provides short-term relief, experts warn it’s not a permanent solution. The key to stability remains the reopening of the Strait of Hormuz.
The Bigger Picture
Oil prices are now about 40% higher than before the recent conflict began. While emergency reserves may ease immediate pressure, long-term stability depends on reducing tensions and restoring safe passage for global energy supplies.