Macquarie: Two More Months of War Could Send Oil to $200

Core Viewpoint - Analysts at Macquarie Group warn that oil prices could reach a record $200 per barrel if the conflict in the Middle East continues through the second quarter, with a 40% chance of this scenario occurring [1]. Group 1: Oil Price Predictions - The likelihood of the Iran war extending until June is estimated at 40%, while a resolution by the end of March is considered more likely at 60% [1]. - If the Strait of Hormuz remains closed for an extended period, oil prices may need to rise significantly to reduce global oil demand [2]. - Other analysts suggest that if the Strait of Hormuz remains blocked for another month or two, oil prices could surge to between $150 and $200 per barrel, potentially causing a global economic shock [3]. Group 2: Supply Chain and Market Reactions - With 20% of global oil supply affected by the closure of the Strait of Hormuz, buyers are rushing to secure physical cargoes, and refiners in Asia are contemplating cuts to processing rates [4]. - The International Energy Agency's coordinated release of 400 million barrels will only cover about four weeks of disruption, highlighting the limitations of strategic stocks as a temporary solution [5]. - Historical supply shocks indicate that if the conflict and disruptions persist, Brent crude prices could rise to between $150 and $200 per barrel, with some petroleum products potentially exceeding $200 to $250 per barrel [6].