Global crude oil prices have surged by more than 40 percent in the past 15 days as tensions between the United States, Israel, and Iran continue to disrupt oil supply routes in West Asia. Market experts warn that prices could climb even higher if the conflict escalates and supply disruptions persist.
Kayanat Chainwala, Assistant Vice President at Kotak Securities, said crude oil could touch USD 120 per barrel in the short term and may even approach USD 150 per barrel if the war continues for more than a month.
According to Chainwala, WTI crude may trade between USD 85 and USD 120, while Brent crude could range between USD 90 and USD 125 in the near term. However, prolonged conflict and supply disruptions could push prices significantly higher.
She explained that instability around the Strait of Hormuz, a critical global oil shipping route, has already caused major supply losses of around 10–12 million barrels per day. Earlier this year, global markets were facing an oversupply of 4–5 million barrels per day, but the current disruption has wiped out that surplus and shifted the market toward a deficit.
Chainwala also noted that emergency reserves may not be enough to stabilize the situation if disruptions continue. The International Energy Agency’s 400-million-barrel reserve release would only cover roughly 20 days of lost supply, which could prove insufficient during a prolonged crisis.
She added that extended disruptions in oil transport could push crude prices higher while negatively affecting other commodities by fueling inflation and potentially delaying global interest rate cuts.
However, she pointed out that prices could fall sharply if tensions ease. In the event of de-escalation, the geopolitical premium built into oil prices may disappear, potentially bringing crude down to USD 55–65 per barrel, especially since markets were already under pressure earlier this year due to economic concerns and excess supply.
Currently, oil movement through the Strait of Hormuz remains heavily restricted. Only 2–3 million barrels per day are reportedly passing through the route, compared with the usual 20 million barrels per day, with some countries receiving limited preferential access.
On the demand side, China’s modest economic growth target of 4.5–5 percent and the absence of major stimulus measures may prevent sustained upward pressure on crude prices. Seasonal travel demand in May and June could temporarily support prices, but broader factors may limit long-term gains.
In the domestic market, Chainwala said crude oil prices on the MCX could rise 20–30 percent from current levels of around ₹8,300, potentially reaching ₹10,500–₹11,000, depending on how long the supply disruptions continue.
She concluded that if the conflict intensifies or spreads further, oil prices could climb beyond current projections. However, if tensions remain limited to minor attacks or diplomatic negotiations begin, the crude market may stay volatile but likely within the USD 85–120 range.
