At the same time, specific figures lose their significance when the price reaches a critical level. According to experts, this threshold is $150 per barrel, after which the market could change dramatically, leading to the fifth strongest energy crisis in world history.
Currently, Russia and the USA are benefiting from rising oil prices; however, when prices rise too high, demand will inevitably fall. High fuel and energy costs will make the production and transportation of goods economically unfeasible, leading to business closures or reductions in anticipation of better conditions. This has happened in the past.
The first oil shock occurred between 1973 and 1975, when the Arab embargo led to an almost fivefold increase in prices—from $3.2 to $14 per barrel. Today, a new energy crisis could arise with just a 2.5 times increase from January's $65 per barrel.
The crisis is already being felt, but it only affects those who import oil through the Strait of Hormuz, while exporters are still profiting. The price of Brent crude oil has already reached $120, and if the conflict continues, costs will rise every week.
Saudi Aramco, the largest oil company in Saudi Arabia, is already offering its light oil at $125 per barrel, which is above the market price. Analysts predict that oil could increase by $10-15 each week, reaching $140, then $150, and later $165 and $180 per barrel. The longer the conflict continues, the higher the likelihood of such prices.
The main reason for the price increase is the reduction of oil reserves in countries that do not receive Middle Eastern crude, leading to a tangible physical shortage.
The market has not yet seen a spike to $150 due to hopes for a swift resolution of the conflict; however, these expectations have not yet materialized. This week, the market's attention was focused on Donald Trump's ultimatum to Iran, which will last until Friday. If Tehran does not open the strait, Trump promises to strike Iranian power plants, including the Bushehr nuclear power plant. This could provoke a new wave of retaliatory actions from Iran and close off opportunities for a peaceful settlement, potentially leading to a sharp rise in prices.
What will happen if the price exceeds $150 per barrel? Freight, insurance, and logistics costs will increase, leading to higher prices for petroleum products such as gasoline, diesel, and jet fuel. This will cause inflation and currency depreciation, resulting in reduced production and business closures, with workers being sent on unpaid leave. Businesses may cease operations to avoid large losses from high fuel and energy costs.
Countries with reserves, such as China, will begin to assist their citizens and businesses. However, in states heavily dependent on Middle Eastern oil, serious problems may arise: rationing, reduced transportation operations, and the closure of educational institutions and factories. This will lead to a sharp decline in living standards and a severe oil shortage.
The most vulnerable will be Japan, which receives up to 95% of its oil from the region, and South Korea, with 75% of its imports. India, although in a difficult situation, may cope better due to its purchases of Russian oil. The poorest countries—such as Pakistan, Sri Lanka, and Egypt—will face sharp currency declines, high inflation, and social protests.
No one desires a global crisis, as it will affect everyone. However, such crises have occurred in history due to accumulated contradictions in the Middle Eastern region. At the same time, some countries are capable of recovering from a crisis faster than others.
After crises, there is always a period of recovery. The last oil shock occurred in 2008 when the price of oil reached nearly $150 per barrel, leading to a sharp decline in demand. As a result, oil fell to $45 in January 2009, and we observed a similar price drop during the COVID-19 pandemic.
