Oil prices could hit $200 per barrel if the war in Iran continues into summer

Oil prices could hit $200 per barrel if the war in Iran persists through the end of June, according to strategists from Macquarie Group.
If the war were to stretch well into summer, the strategists wrote in a client note on Wednesday, prices would need to move high enough to "destroy an historically large amount of global oil demand," likely requiring Brent crude prices above $200 per barrel and pushing US gasoline prices up to roughly $7 per gallon.
On Friday, Brent (BZ=F) futures traded above $103 per barrel, holding onto roughly 3% gains on the day even after President Trump pushed back his deadline for striking Iranian domestic power infrastructure for a second time. US benchmark WTI crude (CL=F) held onto slightly higher gains to trade above $97 per barrel.
Read more: How oil price shocks ripple through your wallet, from gas to groceries
Earlier in the conflict, the two energy products reached prices not seen since the early months of 2022, following the Russian invasion of Ukraine.
The Macquarie strategists, led by Vikas Dwivedi, assigned a roughly 40% probability to their bull case of $200 per barrel oil. More likely, the strategists wrote, is a situation in which the war ends by the beginning of April, oil prices moderate, economic costs remain small, and global growth only slightly slows.
Such a move would put oil prices far above their all-time highs in 2008 of roughly $147.50 for Brent.
Read more: What an extended war with Iran could mean for gas prices
"The market is still expecting President Trump to soon declare victory, with oil and gas futures heavily backwardated," the strategists wrote. "However, given uncertainty about what victory looks like, and recent attacks on energy infrastructure, there is a risk that prices may need to move significantly higher first to incentivise a near-term deal."
Macquarie isn't alone in calling for higher oil prices. Saudi Arabian energy leaders have predicted that oil prices could reach $180 per barrel if the conflict persists into late April, according to the Wall Street Journal. In a note to employees published March 20, United Airlines (UAL) CEO Scott Kirby said his company is projecting that oil prices will reach $175 per barrel and not moderate back to $100 per barrel until 2027.
Kirby noted that the increased cost of jet fuel, which has doubled, could cost United an additional $11 billion in annual fuel expenses if oil prices remain elevated.
"Honestly, I think there's a good chance it won't be that bad, but as you'll read below, there isn't much downside for us to preparing for that outcome," Kirby wrote.