Global oil markets were jolted this week as crude prices surged past $114 per barrel in London trading after Israel bombed a key Iranian gas field and Iran struck Qatar's major Liquefied Natural Gas (LNG) plant.
These attacks are intensifying fears that a widening Middle East conflict could send prices spiraling toward $200 — a level once dismissed as implausible but now increasingly discussed by analysts and traders.
A new report by OilPrice.com, citing analysis from energy journalist Irina Slav, warns that a severe collapse in Middle Eastern oil production and exports has fundamentally altered the global supply outlook.
The disruption follows escalating regional instability, including recent bombings in Saudi Arabia and Qatar, and mounting concerns that Iran could further target critical oil and gas infrastructure across the region.
According to data cited by Reuters and analytics firms, Middle Eastern oil and fuel exports have plunged dramatically in a matter of weeks.
Shipments that averaged more than 25 million barrels per day in February have dropped to under 10 million barrels daily by mid-March.
Other estimates suggest flows may be as low as 7.5 million barrels per day — representing a collapse of roughly two-thirds.
Production cuts are compounding the crisis. Major producers across the region — including Saudi Arabia, Iraq, the United Arab Emirates, and Kuwait — have collectively shut in more than 7 million barrels per day.
Some estimates from the International Energy Agency suggest total disruptions could reach 10 million barrels daily.
This has effectively erased what was expected to be a global oil surplus in 2026 and replaced it with a severe physical shortage.
"The key issue now is not just pricing — it's availability," analysts note.
With storage capacity strained and some oil being diverted to floating storage rather than immediate delivery, the market is facing a genuine supply crunch. In such conditions, prices tend to rise sharply and remain elevated even after disruptions ease.
Market voices are growing more alarmed. Greg Newman, CEO of Onyx Capital Group, recently told CNBC that while $150 oil is already within reach, $200 is "not ridiculous."
Similarly, Longview Economics strategist Chris Watling warned that prices could even spike beyond that level if supply disruptions persist, noting that commodity markets often move "parabolically" during shortages.
Geopolitical risk remains the dominant driver.
The latest attacks on energy infrastructure in Saudi Arabia and Qatar have heightened fears of broader regional war.
Analysts warn that if Iran escalates its involvement — either directly or through proxies — the conflict could be catastrophic for global energy flows.
The Persian Gulf accounts for a significant share of the world's oil exports, making it uniquely vulnerable to disruption.
Even if hostilities were to cease, recovery would not be immediate.
Restarting oil production after widespread shutdowns can take months, particularly when infrastructure has been damaged or supply chains disrupted.
As Reuters' Ron Bousso has noted, prices may fall after a ceasefire — but are unlikely to return to pre-crisis levels anytime soon due to the lingering supply deficit.
Some temporary relief has come from the release of sanctioned Russian crude into global markets, easing logistical bottlenecks.
However, analysts caution this is only a stopgap measure. Meanwhile, major consumers like China are taking defensive steps, including restricting fuel exports and reducing refining activity to conserve domestic supply.
Despite the growing worry, not all forecasts point to sustained extreme prices. Some analysts still expect oil to retreat below $100 per barrel later this year, assuming a swift diplomatic resolution.
© 2026 Newsmax. All rights reserved.