Three more months of war in Iran could cause Brent crude oil prices to skyrocket, soaring past US$200 a barrel, a report by a global asset management firm warned on Friday.
The ongoing “Gulf War 3” is the key factor in deciding what direction the global economy will head in, the Macquire Group Ltd. said in a note to clients.
The report outlines two scenarios, the first with the war ending at the end of March and the second with the war continuing until the end of June.
In the first scenario, the group’s analysts expect oil prices to fall quickly, “albeit to levels still above those seen pre conflict.”
“If the war begins to wind down soon, the economic costs will likely be relatively small, with global GDP growth to slow only a little relative to last year. It will take a while for energy markets to rebalance,” the note says.
The oil shock from the war is “already bigger than the peak in either of the 1970s oil shocks, or the first two Gulf Wars,” the note said.
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“With the Strait of Hormuz mostly closed, we estimate that around 13% of global oil production will be shut in by the end of March,” it added.
Amid the volatility of ceasefire proposal talks and Iran’s rejection of the U.S. proposal on Wednesday, the price has continued to fluctuate but is hovering around $90 as of this week, with the price breaching $100 on some days.
The global economy may just be able to weather the storm with the 1.2 billion barrels of oil in the strategic reserves of the member countries of the International Energy Agency, which includes Canada, as well as China’s own massive oil reserves, it said.
A prolonged conflict, however, could send oil prices skyrocketing past US$200 a barrel, the report said, adding that it would translate to a price of $US7 per gallon. Currently, the average price of gasoline at U.S. pumps is US$3.9 per gallon.
“If the Strait were to stay closed for an extended period, prices would need to move high enough to destroy an historically large amount of global oil demand,” the report added.
If war continues for three more months, “that would see talk quickly turn to global recession, as the world experiences a substantial market risk off.”
This warning echoes one made by Iran’s military command, which said earlier this month that the world should be prepared for oil to hit US$200 a barrel, as more ships came under attack in the blockaded Gulf.
While “the market is still expecting President Trump to soon declare victory,” the Macquarie report said, there is “uncertainty about what victory looks like.”
Given the recent attacks on energy infrastructure throughout the region, “there is a risk that prices may need to move significantly higher first to incentivise a near-term deal,” the report added.
The swindler Carney, didn’t he say that Canada has no oil reserves and that European countries and Australia would offer help? Where would the help come from?
Stop touching kids james
Nuke iran and get rid of this pile of garbage period!
Hahahahaha! The Troll has been trolled. LA-LA-LA-LAAA!!! Phuc u!
The Anonymous users are really just james Bilodeau being an ass towards the rest of us. JAMES PLEASE GET OFF THIS SITE
I think that golden pager is probably a reminder of why the US had to get in on this nonsense. Fear seems to be a good tactic.
Sure! Canada has plenty of oil and gold and many other resources but Canadians have none. Foreign companies controlling our actual assets in exchange for creating a few jobs and giving us a little paper. Canadians should have the highest standard of living, if only we reaped some of the benefits.
I’m not normally a pessimist but ‘Gulf War 3’ is NOT going to be over by the end of June! It is very likely the US will initiate a full ground invasion of Iran about that time with a bloodbath for American troops over the next couple of years. The end result, the Americans pulling out much the same as they did in Afghanistan with the Iranian regime very much still in place!
That is of course unless the American people revolt and throw the whole Republican party out on their ear. They don’t want another costly war!!
This war is so Trump and his cronies can make more money, throw him out!
whos the moron who wrote the article for Canadians quoting American gallon prices.
Id jump on polymarket, trump wont see 2028. guy has gone total 180 on every platform. he’ll be impeached next year after midterms while this war STILL goes on hahahaha
There is no shortage of oil, because there are 300 billion barrels in the Alberta tar sands regions. Canada does not get oil from Iran. To avoid the high prices, buy an EV.
This article is ridiculous. Oil COULD breach $200 if the war continues to June!!!!!! It would far surpass that number long before then if this continues. The 1.2 billion barrels in strategic reserves will allow us to weather the storm, which includes Canada!!!! Are you serious, how many barrels are shut in now 10 million plus per day, you think all that will come back online when this ends? What strategic reserves does Canada hold exactly? So drain the member countries dry, assuming you can even get all of that 1.2 billion barrels out of salt caverns without issue. Or the supposed shadow fleet roaming the ocean with untold amount. This is what happens when you have the dumbest people are in charge.
LOL,Using a Asset Management Report.
Wake Up.
They are manipulating investors fears to make profits.Corruption and Cash are close friends in the world of finance and politics.
H itler was right! We should be rid of all the Jews!! And while we’re at it, all the muslims too!! Heil !!
Canadians should start knocking on the doors of B’Nai Brith and all traitorous Zionist groups in Canada and make them pay for this.
Thanks to the Zionist demons.
Do you want to find a woman for one night? Come on ~ Xdate.mom
xdate.mom
Well!
More of that golden age of America Trump promised
Oh who gives a f*ck. Im weary of the whole damn thing. There is about 2 months then to take Trump and Nuttyyahhoo out. Come on Russia. Hammer time.
Only Israel and the USA to blame for this! Gasoline/diesel price was high before this stupid illegal conflict BUT Trump wanted to give all his family and buddies some insider trading profits…
Trump has already declared victory. He just needs to stop attacking, remove his troops, and the major hurdle, is to convince Israel to stop attacking.
Trump and Nutty need to end this self destructive action now.
You mention Iran refusing Trump’s proposal, but why have you not mentioned Trump rejecting Iran’s proposal. Spinning to make it look like this is Iran’s fault???
Trump is hinting he will be ending it by the end of the first week in April. Else he will look even sillier extending his absolute deadline again…