Oil at $200 a barrel? PKO BP analysts presented a worst-case scenario

Iran's long-term blockade of the Strait of Hormuz may raise Brent oil prices to $140-200. per barrel – forecast PKO BP analysts. They added that in the event of disruptions in gas supplies from the Middle East for 3 months, LNG prices may increase towards EUR 100 per MWh.

The attack on Iran began on Saturday morning. The supreme leader's headquarters in Tehran and Iranian military targets were attacked. Iranian authorities on Sunday confirmed the deaths of the country's supreme leader Ali Khamenei, commander of the Islamic Revolutionary Guard Corps (IRGC) Mohammad Pakpur and influential security adviser Ali Shamkhani. Tehran responded by attacking Israel and several Persian Gulf states, including American bases located there.

On Monday, PKO BP Bank analysts pointed out that in response to the US-Israeli attack on Iran, Brent crude oil prices jumped on March 2, in the morning part of the session, to USD 82.4. per barrel, i.e. to the highest level since January 2025.

The markets reacted

“The appreciation of the raw material reached 14% day by day. The market calmed down quite quickly and the oil price stabilized around USD 79 per barrel, 9% above Friday's closing,” they noted.

They added that on the afternoon of March 2, the price of gas also temporarily jumped to EUR 49.1 per MWh, the highest level in over a year, following Qatar's decision to suspend production of the blue fuel due to the attacks. The bank's analysts noted that the day-to-day appreciation exceeded 53%. After 3 p.m., the raw material prices dropped to around EUR 44 per MWh.

“The main recipient of Qatar's LNG is Asia, but the fuel has become more expensive in Europe due to increased competition for the available raw material. According to Reuters, QatarEnergy is to suspend LNG exports due to force majeure,” analysts said.

They noted that investors' eyes are focused on the Strait of Hormuz, through which approximately 20 percent of the traffic flows. world oil and significant amounts of jet fuel, diesel and gasoline. “Although Iran has not technically blocked the strait, transport is limited due to the increased threat to commercial ships in the region,” said PKO BP representatives. Also in the case of the LNG market, the Strait of Hormuz accounts for approximately 20%. world supplies of raw material.

In their opinion, the basic scenarios of developments in the Middle East paint a picture of a conflict that will probably last several weeks and pose a risk of an increase in raw material prices.

“The scale of appreciation will depend on possible disruptions in oil production and transportation in the region. In the event of delays in deliveries, Brent prices are likely to increase to the range of USD 80-90 per barrel. A drop in production may push the price of oil to around USD 100 per barrel. In the extreme case of an effective, long-term blockade of the strait by Iran, an increase in Brent prices is forecast. up to $140-200 per barrel” – PKO BP experts predict.

They pointed out that currently, mainly Iranian ships and Chinese-flagged ships are passing through the strait – the Middle Kingdom is the main recipient of raw material from Iran, the export of which in February probably exceeded 2 million barrels per day. “Yesterday's decision by OPEC+ to increase production in April by 206,000 barrels per day (approx. 0.2% of global demand) went unnoticed. The use of the cartel's spare production capacity, estimated at 4.6 million barrels per day, is largely related to the availability of the Strait of Hormuz,” analysts noted.

According to them, the situation can be partially alleviated by the Saudi East-West oil pipeline with a capacity of 7 million barrels per day (supplying raw material to ports located on the Red Sea) and the United Arab Emirates pipeline, capable of transporting 1.8 million barrels of oil per day to the Fujairah terminal.

Oil and gas prices are skyrocketing

As the bank's experts reported, the European gas market also sharply discounted the increase in geopolitical tension in the Middle East. TTF 1M benchmark quotations (one-month – PAP) opened with a jump of 19%. day to day up to EUR 38 per MWh.

They pointed out that according to the January report of the European Commission for the second quarter of 2025, LNG supplies from Qatar accounted for 4%. all gas imported to the European Union, including 8 percent imported LNG (No. 3 after the USA and Russia). During the analyzed period, Qatar was the third largest exporter of liquefied gas in the world (after the USA and Australia) with 19%. market share. They also informed that, according to some market participants, in the event of short-term disruptions in the supply of liquefied fuel from the Middle East, the TTF price may increase to EUR 40-50 per MWh. “Long-term disruptions, of the order of 3 months, may push the price of the raw material towards EUR 100 per MWh. The situation is worsened by reduced fuel stocks in the European Union, currently amounting to less than 30% compared to, for example, over 38% a year ago,” they noted.

The Strait of Hormuz, controlled by Iran, connecting the Persian Gulf with the Arabian Sea and the Indian Ocean, is a key point on the world trade map. Following Saturday's US and Israeli attacks, the Iranian Revolutionary Guard (IRGC) announced that no units were allowed to enter the strait; hundreds of tankers were disabled on both sides. (PAP)

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