Middle East tensions have just hit your wallet. On Friday, US crude surged over $90—the biggest single-day jump since 2020. Goldman Sachs is now warning that oil could hit $100+ per barrel within days if Iran tensions escalate further, with a $150-per-barrel scenario possible in an extreme situation. With the Strait of Hormuz now flowing at just 10% of normal capacity, global oil supply is under serious pressure. This disruption is 17 times worse than the Russia-Ukraine war. Here’s what you need to know, and why it matters to you.
The Strait of Hormuz Is Basically Broken
About 21% of the world’s traded oil flows through the Strait of Hormuz—a narrow waterway between Iran and Oman that’s become a chokepoint. Right now, it’s operating at just 10% of normal throughput. That’s not a minor inconvenience; it’s a crisis in slow motion. When supply tightens and demand stays put, prices spike. Simple economics.
Israel struck four oil depots in Tehran and Alborz Province this week, ramping up tensions. Qatar’s energy minister has already warned of the impact. Goldman Sachs analysts weighed in with a stark projection: if things escalate further, oil could hit $100+ per barrel within days. In an extreme scenario, they’re saying $150 per barrel isn’t off the table.
Why This Is Worse Than 2022
When Russia invaded Ukraine in 2022, oil spiked—but not like this. The Iran disruption is hitting 17 times harder in terms of supply impact. That’s because the Strait of Hormuz is a literal bottleneck: there’s no easy workaround, no alternative route for that volume of oil. Every tanker heading out of the Persian Gulf has to pass through those waters.
The fact that crude already hit $90 on a single day tells you how spooked the markets are. Traders aren’t waiting for a worst-case scenario—they’re pricing in the risk now. If things escalate, you’ll see prices climb fast.
What It Means for Your Petrol Pump
Here’s the thing about global oil prices: they flow straight through to your forecourt. If crude hits $100+, expect petrol and diesel to climb. Energy costs ripple through everything—groceries, shipping, heating, electricity. It’s not just about filling your tank; it’s about inflation creeping back into the system.
The good news? Markets have priced in some of this risk already. The bad news? There’s still upside risk if geopolitical tensions worsen. Watch this space.
The Bottom Line
Oil is tightening fast, and the market is nervous. Goldman Sachs’ $100+ warning isn’t hyperbole—it’s a realistic scenario if the Iran conflict escalates. The Strait of Hormuz disruption is unprecedented in scale, and there’s no quick fix. Prices could climb sharply in the coming weeks. Keep an eye on headlines, and don’t be shocked if your energy bills spike.
Want more like this? Sign up to The MJBurrows Briefing — our free weekly newsletter delivered every Monday morning.
FAQ
Could oil really hit $150 per barrel?
Goldman Sachs says it’s possible in an extreme scenario, but it’s not the base case—more like a tail risk. It would require significant escalation beyond current tensions.
How long will the Strait of Hormuz disruption last?
That depends on how the Iran conflict plays out. If tensions ease, throughput could normalise within weeks. If it escalates, we’re looking at months of tight supply.
Will my energy bills definitely go up?
Almost certainly, yes—just by how much depends on how high crude climbs. A $100 barrel would mean meaningful pain at the pump and higher heating costs for most households.
Why is the Strait of Hormuz so important?
It’s the world’s most critical oil chokepoint. 21% of global traded oil passes through it daily, and there’s no alternative route. Any disruption creates massive supply pressure.
Should I panic about this?
Short answer: no. Markets are already pricing in the risk. Stay informed, plan for higher energy costs, and remember that geopolitical situations can change quickly.
DISCLAIMER
Effective Date: 15th July 2025
The information provided on this website is for informational and educational purposes only and reflects the personal opinions of the author(s). It is not intended as financial, investment, tax, or legal advice.
We are not certified financial advisers. None of the content on this website constitutes a recommendation to buy, sell, or hold any financial product, asset, or service. You should not rely on any information provided here to make financial decisions.
We strongly recommend that you:
- Conduct your own research and due diligence
- Consult with a qualified financial adviser or professional before making any investment or financial decisions
While we strive to ensure that all information is accurate and up to date, we make no guarantees about the completeness, reliability, or suitability of any content on this site.
By using this website, you acknowledge and agree that we are not responsible for any financial loss, damage, or decisions made based on the content presented.
