Global energy markets are bracing for a potentially historic price surge as Saudi officials warn that crude oil could spike to $180 per barrel — or higher — if ongoing supply disruptions tied to the Iran conflict are not resolved by late April.
At $180 a barrel, Americans would have to pay more than $7 a gallon, according to estimates.
According to projections cited by Gulf energy officials and the Saudi national oil company, The Wall Street Journal reported that the kingdom's base-case scenario now assumes a prolonged disruption to key shipping routes and infrastructure.
While Saudi Arabia stands to benefit from higher oil revenues, officials are increasingly alarmed at the broader economic consequences such a spike could trigger, including demand destruction and a global recession.
The warning comes as Brent crude has already surged to around $119 per barrel following a wave of attacks on energy infrastructure across the Gulf.
Analysts note prices have climbed roughly 50% since hostilities escalated in late February, as millions of barrels per day have effectively been removed from global supply.
A key driver of the surge is the effective shutdown of shipping through the Strait of Hormuz, one of the world's most critical oil chokepoints.
Before the conflict, Saudi Arabia alone exported as much as 6 million barrels per day through the strait.
With that route now largely inaccessible, producers across the region — including Iraq, Kuwait, and the UAE — have been forced to curtail exports due to limited alternative pathways.
Saudi Arabia has partially mitigated the disruption by rerouting crude through its East-West pipeline to the Red Sea port of Yanbu.
Shipping data indicate exports from Yanbu are set to reach a record 3.8 million barrels per day this month.
However, even with maximum capacity, these alternative routes cannot fully replace the volumes previously transported through Hormuz.
Compounding the crisis are continued attacks on refining and processing infrastructure, which have further constrained output and heightened fears of sustained supply shortages.
Oil traders are increasingly positioning for extreme scenarios, with options markets showing strong bets on prices hitting $130, $140, and even $150 in the coming weeks.
Beyond oil, the conflict is now threatening global natural gas supplies. Iranian-linked attacks on a major liquefied natural gas (LNG) facility in Qatar — one of the world's largest exporters — have raised the likelihood of severe disruptions in gas markets.
Any prolonged outage in Qatari LNG exports could send shock waves through Europe and Asia, both heavily reliant on imported gas.
The combined impact of constrained oil flows, damaged infrastructure, and potential LNG shortages is fueling fears of a broad energy shock.
Central banks are already warning of the consequences. Federal Reserve Chair Jerome Powell noted that sustained energy price increases would place downward pressure on economic growth while simultaneously driving inflation higher — a difficult scenario for policymakers.
Saudi officials themselves are wary of the implications.
Prices approaching $180 per barrel could push consumers to permanently reduce oil consumption, accelerate shifts to alternative energy, or trigger behavioral changes such as reduced travel and increased remote work.
Such shifts could ultimately erode long-term demand for crude.
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