Global oil prices could more than double if the conflict involving Iran persists for several weeks, according to Qatar’s energy minister, raising concerns about a potential global economic shock.
Saad al-Kaabi warned that the price of a barrel of oil could surge beyond $150 if fighting leads to prolonged disruptions in energy supplies across the Gulf.
Currently, oil is trading at around $85 a barrel, but markets have already been shaken by recent military strikes launched by the United States and Israel against targets in Iran.
In an interview with the Financial Times, al-Kaabi stated that the economic consequences could be severe if the war continues.
“If this war continues for a few weeks, global GDP growth will be affected,” he said. “Everyone’s energy prices will rise.
There will be shortages of certain products, leading to a chain reaction of factories that cannot supply.”
He also warned that Gulf energy exporters might even shut down production if the conflict escalates further, a scenario that would drive prices sharply higher. Even if fighting subsides quickly, al-Kaabi cautioned that it might take weeks or months for global production cycles and supply chains to return to normal.
This warning comes as the Israel Defence Forces announced that they had destroyed an underground military command bunker in Tehran, which was reportedly intended for use by Ali Khamenei, Iran’s supreme leader, before he was assassinated earlier in the conflict.
However, the head of the International Energy Agency (IEA) sought to alleviate fears of an immediate supply crisis. Fatih Birol told reporters in Brussels that despite the disruptions caused by the war, global markets still have sufficient supplies. “There is plenty of oil; we have no oil shortage. There is a huge surplus in the market,” he said. “We are facing a temporary disruption, a logistical disruption.”
Dr Birol added that while the agency was monitoring the situation closely, there are currently no plans for a coordinated release of emergency oil stocks. Nonetheless, markets remain unsettled by reports that Iran has attempted to disrupt shipping through the Strait of Hormuz, one of the world’s most important oil transit routes.
Earlier this week, Brent crude prices rose by 3.2 per cent to around $80 a barrel, while gas prices surged by roughly 30 per cent amid fears that the conflict could extend further across the region.
