Escalation to direct conflict and renewed Iranian oil export blockades could drive crude prices sharply higher, an economist said.
Brent crude prices could climb to $125 per barrel if U.S.-Iran tensions escalate into full-scale military conflict and Washington reimposes a blockade on Iranian oil exports. The projection reflects potential supply disruptions in a key oil-producing region.
Markets have adapted to past geopolitical risks by diversifying import sources, increasing inventories, and developing alternative supply chains. However, a sudden, large-scale disruption could still overwhelm these buffers, particularly if multiple producers are affected.
Analysts note that economic pressure on Iran may outweigh concerns over oil market volatility, potentially justifying stricter export restrictions despite the risk of price spikes.