$200 Oil? Analysts Warn Prices Could Explode if Iran War Drags on

With input from Bloomberg, the Financial Times, Reuters, and the Wall Street Journal.

Oil markets are on edge – and the worst-case scenario is getting louder.

Analysts at Macquarie are warning crude could surge to $200 a barrel if the war involving Iran stretches into June. That’s not a baseline forecast. It’s the kind of outcome tied to prolonged disruption, tighter supply, and a conflict that refuses to cool down.

Even the possibility is enough to rattle markets.

Right now, prices are already elevated. Oil has been swinging sharply day to day, reacting to every headline – a pause in attacks here, a new threat there. At one point, prices dipped after President Donald Trump signaled a temporary halt to strikes on Iran’s energy infrastructure. The relief didn’t last long.

The bigger concern hasn’t changed: supply.

The Strait of Hormuz remains the pressure point. A huge share of the world’s oil passes through that narrow corridor, and any sustained disruption there can send prices higher in a hurry. Traders are watching it closely, along with signs of damage to energy facilities across the region.

If the conflict drags into early summer, the effects start to stack up. Inventories shrink. Shipping risks climb. Insurance costs spike. Countries begin scrambling for alternatives that aren’t easily available.

That’s how you get to extreme numbers.

Some analysts say prices wouldn’t need a full shutdown of supply to surge – just enough uncertainty to keep markets tight and buyers nervous. A prolonged squeeze, rather than a sudden shock, could do the job.

There’s also the issue of timing. Oil markets were already walking a fine line before the conflict, with demand holding steady and spare capacity limited. Now, any disruption hits harder.

Still, not everyone is convinced the worst will happen. Diplomatic signals – even small ones – have been enough to briefly pull prices lower. The problem is they haven’t held.

For now, the market is stuck in a loop: hope for de-escalation, followed by fresh doubts.

Macquarie’s warning lands squarely in that uncertainty. If the war winds down soon, prices could stabilize. If it doesn’t, the ceiling might be a lot higher than many are prepared for.

And $200 oil, once seen as extreme, is back in the conversation.