Brits warned petrol prices could 'skyrocket' as Iran 'close to blocking' Strait of Hormuz
22 June 2025, 22:47 | Updated: 23 June 2025, 19:52
Oil prices will surge to more than $100 a barrel if Iran blocks the key oil shipping route in retaliation for US strikes, analysts have warned.
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Iran’s parliament voted on Sunday to close the Strait of Hormuz, through which tankers carry about a fifth of global oil supplies.
The decision is not yet final, and requires approval by Iran's Supreme National Security Council.
Lawmaker and Revolutionary Guards Commander Esmail Kosari told the Young Journalist Club on Sunday that closing the strait is on the agenda and “will be done whenever necessary," according to Reuters.
If Iran’s Supreme National Security Council approves the move - which has been threatened before - analysts say it will be a "worst-case scenario."
According to market research and data analytics company GfK, oil prices have surged over the past week as the conflict in the Middle East continued to escalate.
Some experts have now warned that the closure of the critical Strait of Hormuz waterway could see oil prices hit 100 US dollars (£74.43) a barrel.
Oil prices jumped to the highest level for nearly six months in recent days as fears grow over supply concerns after the US joined Israel in attacking Iran’s nuclear facilities.
Brent crude surged to more than 78 US dollars (£58.06) a barrel before paring back a little to stand 77.6 dollars (£57.76) higher in early morning trading on Monday.
The cost of oil has risen sharply since the recent Israel strikes on Iran’s nuclear sites, with the US launching an aerial bombing on three facilities in Iran over the weekend, with investors worried over counter attack moves by Iran.
Kallum Pickering, chief economist at Peel Hunt, told The Times an attempt by Iran to attack or mine the strait would cause “a significant global supply and price shock, depressing global GDP and pushing up inflation”.
The global benchmark oil price has already risen by about $10 a barrel to more than $77, the highest price since January, in response to fears that Iran could block the strait.
Historian Sir Niall Ferguson has warned that markets have been “complacent” about the risk of Iran blocking the strait.
The would send oil “way above” $100 a barrel and cause an economic shock on a scale not seen since the 1970s, he told The Times CEO Summit.
David Fyfe, chief economist at Argus Media, has said that closure of the strait could raise prices to between $100 and $150 a barrel.
Pickering said it was “worth noting that China is heavily dependent on the Strait of Hormuz for its trade”.
“If Iran tries to block that stretch of water, it risks an all-out war with the most powerful country in the world [the US] and badly antagonising the second most powerful [China],” he said.
“Headlines predicting oil prices above $100 a barrel should be viewed as forecasts for worst-case scenarios at this stage.”
The Iranian revolution of 1979 and the subsequent Iran-Iraq war resulted in oil prices more than doubling from $14 in 1978 to $35 in 1981.
More recently oil prices skyrocketed to $139 a barrel in the aftermath of Russia’s invasion of Ukraine in 2022.
