Macquarie warns: If the Iran conflict continues until June, oil prices could surge to $200

Ask AI · What if an oil price breakout above $200—how would it hit global energy demand?

Macquarie’s latest warning says that if the U.S.-Iran conflict continues through the end of the second quarter of this year, and the Strait of Hormuz remains under continuous blockade, international oil prices could break above $200 per barrel, setting a historic record.

On March 27, Macquarie analysts, including Vikas Dwivedi, said in their latest published research report that the probability of the conflict dragging on until June is about 40%; if that happens, oil prices will reach the “historically high real price level.” In the other 60% probability scenario, the conflict could end by the end of this month.

An almost full blockade of the Strait of Hormuz has abruptly tightened the global energy supply picture. Macquarie analysts said that the blockade of the strait “has caused a sharp surge in crude oil and refined product prices,” and the scale of the impact is so large that it will leave a mark in history.

Brent crude’s March gain has already set a record for the largest single-month increase in history. Earlier this month, it briefly touched the crisis high of $119.50. If Macquarie’s pressure scenario comes true, the $200 price target would mean oil prices nearly doubling again from current levels and rising far above the 2008 peak.

Two scenarios: Probability distribution determines the market’s direction

Macquarie explicitly lays out two paths in the report.

The report says that in the baseline scenario (probability 60%), the conflict is expected to end before the end of March, and the oil-price shock will then ease; in the pressure scenario (probability 40%), it assumes the fighting continues throughout the entire second quarter, with the Strait of Hormuz remaining closed, at which point oil prices would be forced to climb to a level sufficient to massively destroy global oil demand.

“If the strait remains closed for the long term, prices will need to rise to a level sufficient to destroy a large amount of global oil demand in history,” Macquarie analysts wrote in the report.

The core of this logic lies in the demand-destruction mechanism—when the supply shortfall is large enough and the duration is long enough, the market has no choice but to force demand compression through soaring prices to restore supply-demand balance.

Strait of Hormuz blockade: Global energy arteries suffer a severe blow

The Strait of Hormuz is one of the world’s most important oil transport channels.

Macquarie data show that before the outbreak of the conflict, the amount of crude oil passing through the strait daily was about 15 million barrels, and refined products were about 5 million barrels. An almost full blockade led by Iran has dealt a serious blow to the global energy supply chain that relies on this shipping route.

Macquarie said that the key variables in determining the long-term impact of this conflict on commodity markets are the timing of when the strait reopens and the actual degree of physical damage suffered by energy infrastructure.

According to a Wall Street Insights article, on Thursday U.S. President Trump again postponed the final deadline for strikes on Iran’s energy facilities, delaying it by 10 days and pushing the potential attack timeline to April 6. This is the second time Trump has paused the above-mentioned threats.

Meanwhile, Iran allows 10 oil tankers to pass through the Strait of Hormuz, and Trump characterizes this as a “goodwill gesture” released by Iran. However, this limited opening has not fundamentally changed the overall situation of the strait blockade.