$200 oil isn't as crazy as it sounds

4 hours ago

Oil prices have surged since the start of the Middle East conflict, with crude spiking 51% in March alone, the second-largest monthly increase since 1983.
If the Strait of Hormuz remains closed and the war persists through June, oil could spike above $200 a barrel, potentially pushing US gas prices to $7 a gallon.
Bank of America warns that prolonged closure of the Strait could disrupt the global oil supply chain, leading to demand rationing and a possible recession reminiscent of the 1970s energy crises.
Analysts note that high oil prices balance the market by crushing demand, with inflation-adjusted levels potentially exceeding $200, as seen in 2008.
Forecasts are uncertain due to potential policy shifts; Trump's administration has tools to mitigate disruptions, but the scale of the Hormuz issue may exceed them.
Scenarios for oil prices range from rapid de-escalation averaging $77.50 a barrel by 2026 to severe economic impacts including recession if the conflict escalates.
The Trump administration has implemented measures like releasing emergency oil reserves and easing shipping limits to address supply shortages.

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