The global energy market is currently held hostage by a narrow channel of water. As the blockage of the Strait of Hormuz drags on, the psychological and physical strain on the oil market is notable. Vikas Dwivedi, a Global Oil Strategist from Macquarie Group, recently warned that if this critical waterway remains closed for an extended period, the world could see oil prices spike toward a staggering $200 a barrel.
For the average consumer, these figures are more than just data points on a Bloomberg terminal; they are a direct hit to the wallet. Currently, gas prices have surged past $4.00 per gallon, climbing by over a dollar in just the last month. This rapid escalation is the inevitable result of a supply shock that has effectively severed nearly 20% of the world’s daily oil flow.
A Market Disconnect
The current crisis has created a severe rift between how oil is traded on paper and how it is moving in the real world. Brent crude, which was trading near $109 a barrel last Friday, has already hit crisis highs of $119.50 this month. However, Dwivedi notes that the physical reality on the ground is even tighter than the futures market suggests.
In a recent interview, Dwivedi highlighted this growing instability: “There is a big disconnect between the physical and financial markets, and we think that disconnect will close if the Strait remains largely shut.”
The math of the disruption is staggering. Before the conflict involving the U.S., Israel, Iran, and the Gulf states, roughly 15 million barrels of crude and 5 million barrels of refined products passed through the Strait every single day. With that flow restricted, energy firms have raised prices to maintain profitability amidst the volatility, leaving consumers to eat the costs of the geopolitical fallout.
The Path to $150 and Beyond
While the $200 figure represents a worst-case scenario, Dwivedi sees a move toward $150 as increasingly plausible if a resolution isn't reached by the end of April. Even if the blockade were lifted tomorrow, the consequences of a missing supply would haunt the second quarter.
“We think 120 maybe 125 is kinda the most likely area price will revisit, but if the strait remains largely shut through April, even if you get a single day resolution, you won’t get flows back to normal until May,” Dwivedi explained. “By then the amount of oil that did not make it to the refiners and petrochemical plants will be so large that I think 150 Brent.” Macquarie analysts have assigned a 40% probability to a scenario where the war lasts through June, driving historically high real prices.
Mitigation and the "Houthi Factor"
There are theoretical safeguards that could prevent a total economic meltdown. Strategic Petroleum Reserve (SPR) releases could provide 3 million barrels a day, and the East-West pipeline across Saudi Arabia could offer another 3.5 million. Dwivedi suggests that if these tools are used effectively, the deficit could be narrowed from 13 million barrels a day to a more manageable 3 million.
However, this safety net is fragile. The Saudi pipeline is a fixed target, and historical tensions in the region remain a constant threat. “The pipeline route all of it is at risk,” Dwivedi cautioned. “The Houthis have been strangely quiet, but we don’t have any reason they could not flare back up again and cause problems.” If that infrastructure were compromised, roughly 5.5 million barrels of daily mitigation capacity would vanish instantly.
A New Era of Stockpiling
Beyond the immediate price at the pump, this crisis is fundamentally changing how nations view energy security. Much like China's aggressive reserve strategies, other countries are now realizing that relying on the global supply chain is too risky for a volatile 2026.
“We think this will send a signal to any country we need 90 days inside our own borders,” Dwivedi stated, suggesting that the world is moving toward a model of increased structural demand as nations scramble to build 90-day cushions.
As of April 1, 2026, the price of oil sits near $100 (CLK26), a far cry from the $50-$70 range maintained throughout 2025. Whether we reach the $200 "shock" level depends entirely on the timeline of when the war will end. While President Trump has extended a deadline for potential strikes on Iranian infrastructure to April 6, the market remains on a knife-edge, and Iran remains persistent in seeking a solution that meets their demands. For now, the world waits to see if the Strait will open or if the global economy will be forced to learn how to function at $150 a barrel.
On the date of publication, Oscar Cierpial did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. For more information please view the Barchart Disclosure Policy here.
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