Oil Prices Could Smash $100 per Barrel If Strait of Hormuz Is Closed
Oil prices are already rising significantly, but things could get much worse: Paolo Zanghieri, Senior Economist at Generali Investments, expects a substantial increase in oil prices should the escalating crisis in the Persian Gulf persist longer. In a current assessment, the expert warns that the closure of the Strait of Hormuz could drive oil prices above $100 per barrel.
Strait of Hormuz as a decisive factor
According to Zanghieri’s assessment, the reopening of the Strait of Hormuz remains the decisive factor for further price development. The strait is one of the most important bottlenecks in global energy trade. Around 15 to 20 percent of global oil production could be taken off the market by a closure.
“The decisive factor, however, remains the reopening of the Strait of Hormuz. Only then can an increase above $100/barrel be prevented.”
The Generali expert points out that the Iranian Navy hardly has the means for a complete blockade. Nevertheless, isolated attacks on tankers and mining of the strait could drive prices to $90 per barrel or higher.
OPEC+ can only partially compensate for shortfalls
OPEC+ did decide to expand supply by 206,000 barrels per day. Moreover, spare capacity of just under three million barrels per day could theoretically replace Iranian exports of 1.6 million barrels per day. OECD reserves are also in the normal range.
However, Zanghieri sees the greatest danger in direct attacks on oil facilities in the Gulf states, which would cause prices to rise sharply. At the same time, the Iran would further damage its already weak regional relations and also turn China against itself.
Background: Oil prices rise after escalation in the Middle East
On Monday, oil markets reacted immediately to the military escalation. Oil prices rose sharply following the coordinated attacks by Israel and the USA on Iran, but then gave back some gains. In the night into Monday, prices for Brent crude from the North Sea and US crude rose by more than ten percent each in the first minutes of trading.
Brent crude reached a peak of $82.37 per barrel, the highest level since July 2024, and US crude reached $75.33, the highest level since June 2025. Later, the price for North Sea Brent crude for April delivery was still around 7.5 percent higher at $78.05. The price for US West Texas Intermediate (WTI) crude rose by more than $4 to $71.52.
Iran restricts shipping traffic
Iran responded to the attacks by restricting shipping traffic through the Strait of Hormuz. Around one-fifth of global oil transports pass through the strait daily in the oil-rich region of the Persian Gulf. Any disruption can drive up energy prices and unsettle international markets.
Approximately 20 million barrels of oil and nearly one-fifth of global LNG deliveries are transported through the Strait of Hormuz daily. In addition, Houthi rebels announced new attacks in the Red Sea, further increasing pressure on international trade routes.
Other experts expect three-digit prices
Other analysts also share the assessment of rising oil prices. Commerzbank’s chief economist, Jörg Krämer, assumes that the price of Brent crude could continue to rise toward the $100 mark in the event of a prolonged closure of the Strait of Hormuz. Such a development would mathematically increase inflation in the eurozone by more than one percentage point and reduce economic growth by several tenths of a percentage point.
Analysts at BNP Paribas also consider price peaks for Brent of more than $100 possible in their extreme scenario. However, the fact that Iran has stored large quantities of oil at sea in advance, China has built up high reserves, and Saudi Arabia and the Emirates could divert oil through pipelines has a price-dampening effect.
