Recent developments indicate that tensions between Iran and the United States have entered a phase of “active deterrence”—a stage in which threats serve as bargaining tools rather than necessarily a prelude to war. Nevertheless, the oil market always reacts to probabilities, not merely to realities.
In such conditions, any miscalculation could abruptly raise energy costs. The experience of the Ukraine war demonstrated how a “war risk premium” can add dozens of dollars to the price of a barrel of oil. Although the market is currently facing a relative supply surplus, the psychological capacity for price increases still exists.
A scenario of direct—even if limited—confrontation could steer oil prices toward the $80 range. Moving beyond that level, however, would require a sustained disruption in supply or a serious threat to energy transit routes.
Strait of Hormuz: Chokepoint of Global Energy Security
The Strait of Hormuz is not merely a maritime passage; it is the vital artery for roughly one-fifth of global petroleum liquids consumption and a significant share of liquefied natural gas trade. Any meaningful disruption along this route would evolve beyond a regional tension into an international crisis.
If the assumption of the Strait’s closure or serious insecurity were to materialise, the supply shock could swiftly unsettle market balance. In such a case, oil prices in the $100 to $130 range would not be far-fetched, as the market prices not only the physical loss of supply but also fear over the persistence of the crisis.
That said, such an action would entail extensive geopolitical costs for all actors and increase the likelihood of international coalitions forming to reopen the route. Therefore, while a full blockade scenario would be the most consequential, it is also the least probable.
Maximum Pressure and a Halt to Exports
Another option is the intensification of economic pressure and the restriction of Iran’s oil exports. In this framework, if Iran’s current exports—estimated at around 1.5mn barrels per day—were to be completely halted, the market would face a tangible supply deficit.
Despite a forecast surplus in the coming years, the full removal of Iranian oil could push prices in the short term into the $70–90 range. The durability of that level, however, would depend on the response of other OPEC+ producers and the speed at which alternative supplies could be brought online.
It is important to note that today’s market is more resilient to limited shocks than in the past. Diversified export routes, strategic reserves and the flexibility of US shale producers help prevent the kind of uncontrolled price spikes seen in previous decades.
Agreement: The Market’s Downside Scenario
Conversely, a scenario involving a renewed nuclear agreement could reverse the equation. An increase of 500,000 to 1mn barrels per day in Iranian oil exports—amid an already oversupplied global market—would likely exert downward pressure on prices.
In that case, Brent crude could drift below $60, and the market could enter a phase of “zero risk premium.” Such a trend would not only benefit major energy consumers but also contribute to easing global inflation.
From a strategic perspective, the oil market is less concerned about the outbreak of war than about unpredictability. The clearer the diplomatic horizon becomes, the narrower the range of price volatility will be.
Accordingly, the energy market is currently in a state of “active waiting.” There are no definitive signs of large-scale conflict, yet neither is there any guarantee of a swift agreement. In this context, the Strait of Hormuz, as the decisive variable, has generated the greatest sensitivity.
Oil at $130 is conceivable only under a scenario of severe and sustained supply disruption. By contrast, an agreement could return prices to lower channels.
Ultimately, the future trajectory of the market depends above all on the degree of geopolitical rationality demonstrated by the actors involved—a rationality which, if strengthened, could steer oil away from the orbit of crisis.
NOURNEWS