Oil is set to hit $100 a barrel in days and even reach $150, experts say as crucial Strait of Hormuz remains shut to tankers and US says war could continue for six weeks

Energy experts have warned that oil prices are expected to exceed $100 per barrel within a few days and could even reach $150 if the war in the Middle East continues.

The alarm comes as the vital Strait of Hormuz remains closed to oil tankers, leaving ships carrying nearly 20 million barrels of crude oil a day stranded in the Persian Gulf and unable to reach global markets safely.

About a fifth of the world’s oil normally flows through this passage, making the outage one of the biggest shocks to energy markets in recent years.

Prices began climbing sharply a week after the United States and Israel launched major attacks on Iran, triggering a regional war in which missile and drone strikes hit countries in the Middle East.

On Monday, President Donald Trump said US military operations against Iran could last four to five weeks but were ‘capable of continuing for much longer.’

Despite the size of the disruption, oil markets have so far remained below extreme levels seen in previous global crises.

But traders and industry executives say the situation is nearing a tipping point as the conflict shows no signs of easing.

Oil prices have already risen above $90; While American crude oil settled at $90.90 on Friday, an increase of 36 percent compared to a week ago, the international benchmark Brent fell by 27 percent to $92.69 during the week.

The effect of this is increasing what consumers and businesses pay for gasoline, diesel and jet fuel, and some drivers are already feeling it at the pump.

A queue has formed at a Tesco petrol station in Bexley, Kent, causing supply problems after the Strait of Hormuz was closed to shipping due to Donald Trump’s attack on Iran

‘This is crazy. “It’s not necessary, especially at a time when people are already struggling, but it’s not unexpected with all the turmoil that’s going on,” said Mark Doran, who was pumping gas in Middlebury, Vermont, on Friday.

‘I don’t think there’s an end in sight to any conflict in the Middle East that we’ve started, so it’s not credible for them to say that an end will come quickly, and the Middle East, you know, is a place that the US can’t solve.’

“As we get more news, it looks like this will last longer,” said Al Salazar, head of macro oil and gas research at Enverus.

Regular gasoline in the U.S. rose to $3.32 a gallon on Friday, up 11 percent from a week ago, according to the AAA Motor Club. Diesel was selling for $4.33 a gallon on Friday; This increased by 15 percent compared to a week ago.

Price shocks were felt even more intensely in European and Asian markets, which are more dependent on energy supplies from the Middle East.

Diesel prices have doubled in Europe and jet fuel prices have increased nearly 200 percent in Asia, according to Claudio Galimberti, chief economist at Rystad Energy.

Energy prices rose throughout the week as the conflict escalated as Iran launched a series of retaliatory attacks, including a drone strike on the US Embassy in Saudi Arabia.

Iran also struck a major refinery in Saudi Arabia and a liquefied natural gas (LNG) facility in Qatar, halting the flow of refined products and taking nearly 20 percent of the world’s LNG supply offline.

“We continue to see reports of ships, refineries or pipelines being hit, so the list is very long,” Galimberti said.

As a result, about 9 million barrels of oil per day were withdrawn from the market due to damage to facilities or action taken by producers, he said. ‘Right now, with all these things closed, we’re in a hyper-deficit situation.’

The United States is a net exporter of oil, but that doesn’t mean it is immune from increases in oil or gasoline prices or that its producers can make up the difference.

Oil is bought and sold on global markets, so even oil produced in the United States has increased in price based on what’s happening in the Middle East.

For many American oil producers, ‘if you put more wells into the ground, there’s about a six-month lag before we get production ramp-up,’ Salazar said.

Additionally, the United States cannot convert all of its crude oil into gasoline. This is because most of the oil produced in the United States is light, sweet crude, and refineries on the East and West coasts are primarily designed to process heavier, sour crude.

As a result, while the United States exports some of its crude oil, it also imports some refined products such as gasoline.

Jerry Dalpiaz of Covington, Louisiana, said he started filling up his cars and gas cans “the day they announced that the United States was launching a military operation against Iran” because he assumed gas prices would rise.

“I can weather the storm because my finances are good, but I feel bad for my citizens who live paycheck to paycheck because they have to drive to get to work and they have to get their oil changed and stuff,” Dalpiaz said.

‘And they need some relief, and it doesn’t look like it’s coming any time soon.’

Trump on Friday released a plan to insure up to nearly $20 billion in losses in the Gulf region, aimed at restoring confidence in maritime commerce, helping stabilize international trade and supporting American and allied businesses operating in the Middle East.

But some energy experts say extra insurance won’t solve the problem.

“The problem is that in the world of oil trading and oil transportation, people are worried about counterterrorism,” said Amy Jaffe, director of the Energy, Climate Justice and Sustainability Laboratory at New York University, adding that they are worried about automated drone speedboats, carrying weapons, flying drones and mines or other devices.

‘In order for the United States to create the atmosphere that will eliminate the current bottleneck in the Strait of Hormuz, solutions to the counter-terrorism problem must be demonstrated convincingly.’

Salazar wondered what the ‘new normal’ would look like and what effective security would look like if the Strait of Hormuz was actually reopened.

‘All it takes is one person with an RPG (rocket-propelled grenade) to stand on shore and take out a tanker, right?’ said Salazar. ‘And it’ll last forever, you know what I mean?’