Worst-case scenario emerges: Oil prices surpass $100 + Saudi Arabia attacked, risking a crisis worse than the 1970s energy crisis

Caixin March 1 (Editor Zhao Hao): After the US and Israel attacked Iran, the global oil market is on high alert for potential supply disruptions.

Analysts expect that when trading resumes on Monday, international oil prices may experience an instinctive surge. But the bigger concern is whether tensions in the Middle East will escalate into a long-term interruption of exports from the Gulf region.

Vanda Insights CEO Vandana Hari said, “It currently looks like the US and Iran may be heading toward an unprecedented full-scale conflict, and its development trajectory is almost impossible to assess.”

Hari added, “If the conflict lasts several days, we could face the worst-case scenario in the oil market, including significant disruptions to Middle Eastern oil flows.” This would require the US to weaken Iran’s navy and military forces to ensure the Strait of Hormuz remains open.

As tensions escalate, market focus has returned to the Strait of Hormuz. Data from Kpler shows that about 13 million barrels of oil pass through it daily in 2025, accounting for approximately 31% of global seaborne oil flows.

Yesterday, Iran’s Islamic Revolutionary Guard Corps announced a ban on any ships passing through the Strait of Hormuz. Within the day, an oil tanker attempting to transit the strait was hit and began sinking.

Bob McNally, President of Rapidan Energy Group, said that considering the global market’s dependence on the Strait of Hormuz for oil production and transportation, this is an “extremely serious development for the global oil and gas markets.”

Industry insiders emphasize that a more important question is “how long it will last”: the rise in oil and liquefied natural gas (LNG) prices will depend on the duration and scope of disruptions in Gulf production and transportation.

Saul Kavonic, Head of MST Marquee Energy Research, said, “Initial signs indicate this is a larger-scale attack on Iran, with counterattacks that could involve multiple Gulf countries.”

Kavonic stated that the market will initially price in a series of risks—from Iran losing up to 2 million barrels per day in exports, to attacks on regional infrastructure, and in extreme cases, the disruption of strait navigation channels.

“This could be three times as severe as the Arab oil embargo of the 1970s, with international oil prices soaring into triple digits, and LNG prices possibly returning to the historic highs of 2022.”

Andy Lipow, President of Lipow Oil Associates, said that although Iran’s oil facilities have not yet been directly targeted, the airstrikes significantly increase the risk of supply disruptions in the region.

Lipow described the worst-case scenario as: “Saudi oil infrastructure being attacked, followed by the complete closure of the Strait of Hormuz.” He estimates the probability of this scenario at about 33%, as Iran may be pushed into a corner.