Oil prices could move significantly higher if the conflict around Iran worsens, according to analyst Muyu Xu. The main point is simple: more fighting means more uncertainty for oil flows, and markets react fast.
What the analyst said
"We think oil prices will continue to stay elevated," Xu said. She added that prices might reach about $120 a barrel if tensions escalate enough to interfere with key supply routes.
Why prices could climb
- Supply route risk - If shipping lanes or pipelines are threatened, getting oil to market becomes harder and more expensive.
- Limited buffers - Many countries do not hold large strategic reserves, so they are vulnerable to short-term shocks.
- Market reaction - Traders often push prices up quickly when geopolitical risk rises, amplifying the effect.
Who would feel the pain
- Countries that import most of their oil and have small reserves.
- Consumers facing higher pump and heating costs.
- Industries that rely on stable energy prices, such as transportation and manufacturing.
In short, Xu warns that a worsening conflict could turn an already tight market into a much pricier one, with some nations suffering more than others.
