Oil Prices Projected to Exceed $90 Amid Escalating Israel-Iran Tensions
By Ines Ferré, Senior Business Reporter
Date: June 13, 2025
Oil prices are on the brink of surging past the $90 mark as geopolitical tensions in the Middle East escalate, particularly the ongoing conflict between Israel and Iran. Recent market activity has prompted analysts to forecast significant fluctuations in crude oil prices, potentially impacting global economies.
Current Market Trends
On Friday, both West Texas Intermediate (WTI) futures and international benchmark Brent crude experienced a notable increase, closing at $72.98 and $74.23 per barrel, respectively. Earlier in the week, oil prices had risen by more than 13% before stabilizing. Observers note that these price surges are largely fueled by the growing conflict, with experts projecting that should the hostilities broaden, the consequences for the oil market could be dire.
Impact of the Israel-Iran Conflict
Goldman Sachs analysts have estimated that the conflict could temporarily disrupt Iranian oil supply by knocking out approximately 1.75 million barrels per day over the next six months. This output loss would only be partially offset by any increase from other producers within the OPEC+ alliance.
In a note published by the investment bank, analysts forecasted a potential peak in Brent crude prices just above $90 per barrel, followed by a gradual decline back into the $60s by 2026 as Iranian supply may stabilize. They caution, however, that further escalation, particularly Iran’s military response to Israeli airstrikes targeting its nuclear facilities, could lead to considerably higher prices.
Risks and Considerations
The next phase of oil price escalation hinges on the nature and scale of Iran’s military response. Analysts warn that any significant military engagement or closure of the Strait of Hormuz—an essential chokepoint through which approximately 20% of global oil flows—could spike prices by as much as 35% from current levels. A worst-case scenario analysis conducted by JPMorgan indicates that, under extreme conditions, Brent crude could reach $120. Both Goldman Sachs and JPMorgan exhibit a cautious perspective, deeming the possibility of a prolonged closure of the Strait of Hormuz as unlikely. Nevertheless, they emphasize the importance of monitoring demand destruction, which could limit any sustained price increases.
Fernando Valle, an energy analyst at Hedgeye Risk Management, expressed concerns regarding consumer affordability at elevated pricing levels, suggesting that demand could diminish significantly if prices rise too high.
A Global Viewpoint
In a letter dispatched to the United Nations, Iranian officials characterized the recent Israeli strikes as tantamount to a "declaration of war." In retaliation, Iran has executed a drone attack on Israeli territory, which some analysts interpret as potentially leading to a more extensive missile campaign in the future.
In light of these developments, former President Donald Trump has urged Iran to pursue negotiations concerning its nuclear program, advising them to act swiftly to prevent further conflict escalation.
Conclusion
As the geopolitical landscape continues to evolve, market analysts and investors alike will be closely watching the fluctuations in oil prices. The situation underscores the intricate link between international relations and global commodity markets, highlighting how conflicts can profoundly impact economic stability around the world.
For now, while oil prices seem poised for a potential spike, the overall consensus remains that sustained increases beyond $90 may not be feasible without causing significant economic repercussions.