Macquarie Warns: Two More Months of Middle East War Could Push Oil to $200 a Barrel

A prolonged conflict in the Middle East could trigger a historic oil price shock. Analysts at Macquarie Group warn that if the war continues through the entire second quarter, crude prices could surge to a record $200 per barrel. The primary risk hinges on the continued closure of the Strait of Hormuz, a critical chokepoint for global oil shipments that has already been shut to most tanker traffic for nearly a month.

Macquarie's analysis assigns a 40% probability to the scenario where the conflict, involving Iran, drags on until June. The more plausible outcome, with 60% odds, is for hostilities to conclude by the end of March. The bank's central thesis is clear: an extended blockade of the Strait would force prices to spike to a level high enough to destroy a historically large amount of global oil demand. The timing of the waterway's reopening and the extent of physical damage to regional energy infrastructure are cited as the main determinants of the longer-term commodity impact.

This warning from a major financial institution amplifies a chorus of analyst concerns about severe market disruption. The Strait of Hormuz is a linchpin for global energy flows, and its prolonged closure represents a direct threat to supply chains. While the base case anticipates a resolution within weeks, the 40% risk of a protracted conflict introduces significant volatility and upward pressure on energy prices, with potential knock-on effects for the global economy.