Oil Could Hit $90 When Markets Open Monday — Strait of Hormuz Disruption Threatens 20% of Global Oil Supply
Global oil prices are expected to surge when markets open on Monday, with analysts projecting crude could jump to between $85 and $90 per barrel — a massive spike from Friday's close of around $72. The main driver: the Strait of Hormuz, which handles 20% of the world's oil consumption, is effectively shut down.
Amena Bakr, head of Middle East and OPEC+ research at Kpler, expects the $85-$90 range when trading begins at 11 PM GMT on Sunday. While the narrow waterway isn't technically completely closed — some Chinese and Iranian vessels have reportedly passed through — insurance costs have become prohibitive and major shipping companies have suspended their fleets.
The numbers are alarming. Rystad Energy analyst Jorge Leon estimates that closure of the Strait of Hormuz would result in a loss of 8-10 million barrels per day of crude supply. 'No matter how much spare capacity is in strategic reserves, it's not going to fill that gap. That gap is just too big,' Bakr warned.
Another Kpler analyst, Michelle Brouhard, described high oil prices as 'the Achilles heel of Trump.' Iran is likely to try keeping crude prices elevated to force Trump to back down, as he promised his electorate low prices — and US midterm elections are coming at the end of this year.
For the Philippines, the ripple effects are immediate: more fuel price hikes on top of nine consecutive weeks of diesel increases, higher electricity costs from LNG-dependent power plants, and soaring transport and logistics costs that will inevitably get passed on to consumers. Gas prices are also expected to surge as Qatar, a key LNG exporter, is directly in the firing line.
Source: Daily Tribune
