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

After attacks in the United States and Israel on Iran, the global oil market is on high alert for potential supply disruptions.

Analysts expect that when markets reopen 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 disruption of exports from the Gulf region.

Vanda Insights CEO Vandana Hari said, “It appears that 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 for 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 capabilities to ensure the Strait of Hormuz remains open.

As tensions escalate, the focus has returned to the Strait of Hormuz. According to Kpler data, about 13 million barrels of oil pass through it daily in 2025, accounting for approximately 31% of global maritime oil flows.

The day before, Iran’s Islamic Revolutionary Guard Corps announced a ban on any ships passing through the Strait of Hormuz. Within the same 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 world’s reliance on Hormuz oil production and transportation, this is an “extremely serious development for the global oil and gas markets.”

Industry experts emphasize that a more important question is “how long it will last”: the increase 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 factor in a series of risks—from Iran losing up to 2 million barrels per day in exports, to regional infrastructure strikes, and in extreme cases, the disruption of straits’ navigation.

“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 a complete closure of the Strait of Hormuz.” He estimates the probability of this scenario at about 33%, as Iran might be pushed into a corner.

(Source: Cailian Press)