Oil at $200? Macquarie flags 40% risk probability as Iran war chokes Strait of Hormuz

Brokerage firm Macquarie has warned that crude oil prices could climb to $200 a barrel if the ongoing conflict involving Iran stretches through June and the Strait of Hormuz remains shut, flagging a 40% probability for this worst-case scenario. 

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The firm said a prolonged conflict through the second quarter could push oil into “historically high” real price territory. However, it pegged a more optimistic outcome at 60%, where hostilities ease by the end of this month, as reported by Bloomberg. 

The warning comes as Brent crude heads toward one of its strongest monthly gains in years, driven by escalating tensions involving the US, Israel and Iran. The near-complete shutdown of the Strait of Hormuz by Tehran — a key route for global oil shipments — has sharply disrupted supply and heightened fears of a deeper energy crisis. 

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The conflict, now over a month old, has already roiled major oil-producing regions. Iran’s control over the Strait, which handles a significant share of oil flows to Asia, has amplified volatility across energy markets. 

"If the strait were to stay closed for an extended period, prices would need to move high enough to destroy an historically large amount of global oil demand," Macquarie's note stated. "The timing of the re-opening of the straits, and physical damage to energy infrastructure, is the main determinant of the longer-term impact on commodities." 

Brent crosses $100-mark again

Oil prices rose on March 27 after two Chinese vessels were prevented from transiting the Strait, signalling that Iran continues to restrict movement through the critical sea route. Brent crude futures for May delivery rose 2.82% to $111.06 per barrel, while U.S. West Texas Intermediate futures gained 2.68% to $97.01. 

The vessels, owned by China Ocean Shipping Company, were turned back, according to ship tracking firm MarineTraffic. The attempt marked the first by a major container carrier to cross the route since the conflict began. COSCO is the world’s fourth-largest shipping line by capacity. 

Trump's 10-day pause

Meanwhile, Donald Trump’s decision to grant Iran a 10-day extension to reopen the Strait has done little to ease supply concerns. In a social media post, Trump said talks with Iran were “going very well” despite “erroneous statements to the contrary by the Fake News Media, and others.” 

As part of the move, the US president said he would pause attacks on Iran’s energy infrastructure through April 6. Iran has not yet commented on the latest remarks.