Gustavo Neffa
Partner & Director at Research for Traders, Economist & Professor
Brent crude deserves to spike to $150 if the conflict stays unresolved for another month, given it reached $130 in 2022 with far less disruption. A peace deal with Iranian disarmament rules and the Strait of Hormuz operating under Western control would bring it to about $90, since damage still needs repair. Goldman Sachs's scenarios run from a six-week disruption spiking it to $120 before a fall to $80, to $140 then $95 over 10 weeks, to $160 without falling below $100. x.com x.com
An imminent Israeli strike on Iran puts Gulf oil infrastructure at unusually high risk over the next three months, supporting a near-term rise in crude oil. Large trades are betting on oil reaching $115 again. x.com
Crude oil supply is tight and US military action would push it higher. Refinery capacity is offline in Russia and the Gulf, and Iran controls two straits, straining the hydrocarbon economy, while both conflicts look set to continue. A US airstrike on Sana'a in the next two months looks likely, making US shipping a target and inviting escalation by Iran and its proxies. Any US action should add about $10 to Brent and $2 to gasoline and diesel, whose supply damage is irreversible near term. x.com
Crude oil should fall back once the US-Iran war ends, likely well before March 2027: if history repeats, Brent returns to the $70 range, as it did within 9-12 months of Russia's 2022 invasion of Ukraine. Money markets pricing a 25bp Fed hike by March 2027 is absurd, because too many investors are blindly extrapolating the current environment rather than thinking through what comes next, including November's midterm elections. x.com
Crude oil could climb past $150 because the Strait of Hormuz closure is blocking 20 million barrels a day and Iran is more determined than Trump assumes. Oil has already gone from $70 to $120 in three weeks, gasoline is up $1 a gallon in four weeks, and fertilizer is up 43%. The Fed cannot cut and might even hike, and Goldman puts recession odds at 25% and climbing. x.com
Crude oil could jump toward $130-140 if a strike takes Kharg Island, Iran's main oil export hub, offline and removes a large chunk of supply at once. Iran would likely retaliate beyond military targets with regional proxies, widening the conflict. Even the risk of disrupted exports or unsafe shipping could push prices sharply higher in thin weekend liquidity as shipping slows and insurance spikes. By Monday, oil and energy-linked assets would be repriced higher and inflation expectations reset. … Show more
Crude oil should fall back into the $60s and likely well below over time once the Iran war is resolved. Middle East producers are overproducing but cannot export the barrels, so when the Strait fully reopens they will flood the market. Oil tried to break down from its trend line but was rejected, and bigger resolution news is likely needed to push it much lower. Cheaper oil would remove current inflation fears, setting up a deflationary boom. x.com x.com
A possible US strike on Iran poses near-term upside risk for crude oil. If Trump expects to lose the midterms, he may act between Israel's October 27 election and the November 3 US vote. Crude has filled the $101 gap and reached the rising channel's midpoint; if it keeps breaking higher, the next levels are $105, $110 and the channel top near $115. x.com
Crude oil should reprice higher because the Iran conflict looks like a multi-year regime, not a short event, and no model carries a 2029 duration. The WSJ reported Vance and Rubio privately warned Trump it could last through his presidency, while the White House floats the biggest naval blockade in history. August PPI rose 5.4% year on year, above estimates, before any blockade effect. Houthis took Mocha and are moving on Bab al-Mandeb, with Brent above $100; $120 talk is the early repricing. … Show more
Crude oil was never headed to $200 because Trump and Treasury Secretary Bessent will do whatever it takes to contain it, though their main tool is running low. Markets rank AI and the Fed above the Iran conflict, which would only hurt them through sustained oil above $100-$110 or new highs. Strategic Petroleum Reserve releases have engineered calm, but the SPR is getting dangerously low and the buffer shrinks each week the Strait of Hormuz stays closed. x.com x.com
Crude oil at $70 prices in far too much optimism and should see $80 before $60. The IRGC knows Trump wants a deal and has little appetite to restart the war, which makes further escalation easy to underestimate. If the Strait of Hormuz is not fully reopened within weeks to a month, the market will realize the disruption is not temporary, and any Iranian transit fees on Hormuz shipping would likely be passed on to buyers. US VP Vance says violence will be met with violence. x.com
