Oil Prices Could Hit $150 as Strait of Hormuz Tensions Escalate

Oil could move toward $150 within weeks if the Strait of Hormuz remains restricted and US-Iran tensions deepen, with some analysts warning that a prolonged supply shock may even bring the $200 level into view.

Brent crude has already moved above $120 a barrel, with prices briefly topping $126 on Thursday as the market reacted to stalled US-Iran talks, the continued disruption of shipments through the Strait of Hormuz and the risk of fresh military escalation in the region. Reuters reported that Brent touched $126.41 before easing, while the conflict has kept one of the world’s most important energy corridors under severe pressure.

The question now facing consumers, airlines, importers and policymakers is how far prices can rise before demand begins to crack.

$150 could come within weeks

Vijay Valecha, Chief Investment Officer at Century Financial, said a move to $150 or $200 is not guaranteed, but the risk has risen because the next major trigger depends on developments between Washington and Tehran.

“Although a surge to $150 or $200 levels is not a given, it remains a possibility and would depend heavily on updates from both the US and Iran,” he said. “A major breakdown of diplomatic efforts or military escalations, with the Strait of Hormuz remaining closed, could be the next catalyst for another oil spike.”

Valecha said recent price action shows how quickly the market can reprice when supply fears build. WTI jumped from about $67.32 to $119.56 in just eight days during the first phase of US-Iran tensions in March, before correcting and then returning close to the $119 mark within about 28 days.