LONDON : A prolonged conflict between the US and Israel against Iran could send global oil prices skyrocketing to as high as $150 per barrel, potentially triggering a sharp economic slowdown and devastating the world economy, a leading American energy analyst has warned.
Matthew Reed, an energy sector expert, stated that with oil prices already hovering near the $100 per barrel mark, any sustained military action in the Middle East threatens to upend the fragile global energy balance. According to Reed, if the war extends for several weeks, prices are almost certain to climb further.
“If tensions continue, we could see prices rise to $120 or even higher,” Reed said. He explained that while a spike to that level would be painful, a worst-case scenario poses a far graver threat.
“If the war lasts longer and the price pushes close to $150 per barrel, the global economy could slow down and demand could fall sharply,” Reed warned. “This could prove disastrous for the global economy,” he added, describing a potential scenario where high energy costs stifle consumer spending and industrial output worldwide.
Reed also cautioned that the chaos in energy markets would not subside quickly, even if hostilities ceased immediately. He noted that the supply chain disruptions and market volatility would create a lasting shock. “Even if the war stops today and a ceasefire is declared, it could take weeks or months for the global energy market to return to normal,” he said.
The situation is further exacerbated by a deepening crisis in the global gas market. Reed highlighted that approximately 20% of the world’s liquefied natural gas (LNG) supply is currently being affected by the conflict. He pointed specifically to disruptions in Qatar, one of the world’s largest LNG exporters.
“The current situation could further worsen the global gas market,” Reed stated. “Qatar has been forced to shut down production, making it almost impossible to make up for the shortfall in a short time.” This halt in Qatari output removes a critical cushion from an already tight global market, leaving importers in Europe and Asia with few alternatives to replace the missing supply.
