Foreign Media Warning: If Energy Crisis Persists, "Oil at $200 per Barrel" May Become Reality

Why is AI Strategic Petroleum Reserve difficult to quickly ease the pressure of soaring oil prices?

China News Service, March 18 — According to comprehensive reports, since the U.S. and Israel launched military strikes on Iran, the international energy market has continued to fluctuate, with oil prices becoming a focus of global attention. A Reuters article on March 17 analyzed that as the energy crisis persists, “oil prices reaching $200 per barrel” may become a reality.

The article states that since the conflict erupted, about 20% of global oil supply (approximately 20 million barrels per day) has been disrupted due to the Strait of Hormuz effectively being closed, which theoretically should have driven crude oil prices even higher.

U.S. President Trump also previously stated earlier this week that “once all this is over, oil prices will drop very quickly,” but this optimistic outlook is increasingly disconnected from reality — the conflict in the Middle East continues to escalate, and the global oil supply crisis is worsening.

For this reason, as the energy crisis continues, the possibility that “oil prices will reach $200 per barrel” seems more likely than Trump’s prediction that “oil prices will soon return to pre-war levels.”

Crude Oil Spot Market Signals Red Alert

The article notes that the crude oil spot market is sending pressure signals. For example, the price of Omani crude oil exported from ports outside the Strait of Hormuz is trading at a $51 premium per barrel over Brent crude, which could push the price of Omani crude for May shipment to around $150 per barrel.

Similar situations are also seen in other markets, with Dubai crude’s spot premium soaring to $56 per barrel on the 16th. This reflects that, as the conflict escalates, the available supply of crude oil faces significant uncertainty.

Against this backdrop, refining companies are under increasing pressure. The article points out that for refiners, especially in Asia, this is a serious issue. About 60% of their crude oil imports depend on the Middle East, and the difficulty of securing alternative supplies is rapidly intensifying.

“The Situation Is More Than Three Times Serious”

Additionally, the article compares the recent fluctuations in international oil prices and market reactions when the Russia-Ukraine conflict first occurred.

Before the Russia-Ukraine conflict, Russia supplied about 30% of Europe’s crude oil imports. At that time, concerns about potential disruptions from Russia, one of the world’s largest oil producers with about 10 million barrels per day, pushed Brent crude prices up to $130 per barrel.

The article states that, according to estimates from Morgan Stanley, the actual supply disruption caused by the recent U.S.-Israel military strikes on Iran has exceeded the market’s initial concern level by more than three times.

Meanwhile, although the oil market was relatively loose before the conflict, the International Energy Agency (IEA) predicted that global supply would exceed demand by about 3.7 million barrels per day, but current supply disruptions have wiped out this excess capacity.

Difficult to See Immediate Price Drop

The article also analyzes that although the IEA announced a record release of 400 million barrels from strategic reserves last week, which somewhat alleviated the initial market shock, drawing down inventories cannot replace new supply.

It points out that even if the Strait of Hormuz reopens immediately, it will not lead to an instant relief from high oil prices. Since the U.S.-Israel military strikes on Iran, about 10 million barrels per day of capacity in the Middle East have been forced offline. Restoring these supplies will take weeks or even months.

The article believes that the supply shock is real and may continue to ferment. Given the severe reality, betting on the U.S. government’s promise of a quick return to normal may require careful reconsideration.