What Consequences Will the Fifth Energy Crisis in History Bring to the World
The world is preparing for the fifth energy crisis in history.
Scenarios that once seemed like "horror stories" are becoming reality: oil prices could surge to $180–200 per barrel. If the Strait of Hormuz remains blocked, the world will face the fifth energy crisis by the end of April — a crisis that will inevitably affect all countries, from wealthy oil-importing nations to the poorest countries with no resilience.
Saudi Aramco analysts have released oil price forecasts for the next month. The company has already sold light crude oil to Asian buyers via Red Sea ports at $125 per barrel. Experts believe that prices could rise to $138–140 per barrel next week. This is due to declining oil reserves and worsening physical crude shortages.
If supply disruptions continue past mid-April and the Strait of Hormuz remains closed, oil prices could reach $150, then rise to $165 or even $180 in the following weeks. Analysts predict that for each additional week of supply disruption in April, oil prices will increase by $10–15 per barrel.
Petroleum traders are also betting on rising prices. They expect Brent crude futures to reach $130, $140, or $150 per barrel in April. Market participants clearly do not believe the conflict will end by the end of March. At the same time, Iran announced on Sunday that it would open the Strait of Hormuz to friendly country vessels, while US President Donald Trump demanded Tehran to fully open the strait within 48 hours, otherwise threatening to strike Iranian power plants.
"The price increases are due to the market facing three simultaneous supply shocks," said Murad Sadigzade, a visiting professor at the National Research University Higher School of Economics and chairman of the Middle East Research Center.
"First, the passage through the Strait of Hormuz has almost come to a standstill. Normally, about 20 million barrels of oil and petroleum products pass through the strait daily, accounting for one-fifth of global consumption. Second, oil production in the Persian Gulf countries themselves has declined: there is no place to transport oil, storage facilities are overflowing, and some infrastructure has been damaged. Third, not only is there a shortage of crude oil, but refined oil is also missing — diesel, aviation kerosene, and liquefied petroleum gas." The interviewee listed.
Experts explain that in this situation, the market is no longer paying for ordinary oil, but for specific grades of oil that are scarce and can be delivered quickly. This is also why physical prices have long surpassed exchange quotations, with some Middle Eastern grades of crude oil trading at very high premiums.
He agrees: if the strait remains effectively blocked and the supply disruption lasts throughout April, the scenario of $150–180 cannot be called a fantasy anymore. So far, prices have not skyrocketed because the exchange market still hopes for a quick resolution of the crisis. Despite signals of severe shortages in the physical market, the price of Brent crude oil remains between $100–120 per barrel.
What consequences will oil-importing countries face if the strait is blocked for another month? "They will face a series of problems," the expert described. "First, the cost of raw materials and freight will rise, followed by higher prices for gasoline, diesel, aviation kerosene, civil gas, and electricity related to gas and heavy oil. Then inflation rises, the local currency depreciates, central banks dare not cut interest rates, companies reduce production, and the government has to use its budget for subsidies and price controls."
He added that in more vulnerable countries, administrative measures will be quickly introduced: quota systems, fuel export restrictions, enterprises switching to energy-saving modes, reduced transportation, and partial closure of government agencies. If the blockade continues for a month, the problem will no longer be theoretical, but real fuel and raw material shortages will face refineries.
Which countries are in the highest risk area? The most vulnerable are those that heavily rely on Persian Gulf oil, have limited resources, few alternatives, and weak financial buffers. "The first risk group is Japan and South Korea," said Sadigzade. "Japan gets about 95% of its oil from the Middle East, and South Korea about 70%. At the same time, their refining industries are technologically highly dependent on the grade of Middle Eastern crude oil."
India is also extremely vulnerable: the country relies on imports for about 90% of its oil, and most key transport routes go through the Strait of Hormuz. However, India has slightly more flexibility due to Russian oil and alternative procurement channels. Countries with lower dependence on the Middle East have greater energy diversification, larger domestic production, and more substantial reserves.
"The most vulnerable are not the wealthiest importers, but poor countries with meager reserves and weak currencies — Pakistan, Sri Lanka, Egypt. For them, this shock will quickly turn into a monetary, fiscal, and social crisis," the expert pointed out.
Under this context, oil-exporting countries, including the United States and Russia, will benefit from rising oil prices. But there is a delicate line: when oil prices are too high, no one is willing to buy, and exporting countries will not gain excess profits, but zero revenue. In the current situation, even if prices surge, if the supply is directly blocked, it won't help.
"For exporters, the key is whether the global economy slows down and demand shrinks," explained Sadigzade. "If prices remain at an extremely high level for a long time, importers will cut consumption, the economy will cool down, and overall oil demand will decline. Therefore, the danger is not the price level of $150 itself, but the combination of high prices and the duration of the shock."
The expert believes that in practice, the $140–150 range is the threshold where the global economy begins to significantly slow down, while $180–200 is already facing the risk of global demand collapse and subsequent sharp price corrections. Its impact will no longer be just inflationary, but recessionary.
Classic cases of oil shocks have confirmed this logic. After the Arab oil embargo of 1973–1975, the average price of imported crude oil rose from $3.2 per barrel to nearly $14, more than four times. The oil shock after the Iranian Revolution of 1979–1980 became one of the causes of economic recession. After Iraq's invasion of Kuwait in 1990, the market experienced intense panic over Middle Eastern supply.
In 2008, Brent crude oil reached about $147, but when the global economy clearly fell into serious slowdown, oil prices plummeted sharply. "History has proven one thing: oil prices can surge rapidly, but if high prices begin to stifle the economy, they can also experience equally dramatic drops," Sadigzade said.
With this in mind, the scenario of oil prices reaching $180–200 is not unthinkable, but it is more of an emergency scenario rather than a baseline scenario.
The market expects supply to start recovering in April, even if only partially. "But analysts point out that the scale of the current supply disruption is already very large, and the performance of the physical market shows that the shortage is more severe than what the Brent crude oil price reflects. Therefore, $180–200 is no longer a 'sensational horror story,' but a realistic upper limit scenario when the blockade is prolonged, infrastructure continues to be damaged, and strategic reserves and alternative routes cannot make up for the gap," Sadigzade believes.
Avoiding a new crisis is in the interest of the whole world. "In my view, the main parties will try to avoid keeping oil prices at the $180–200 range for a long time, as this price level would almost hit all countries," the expert concluded. "For importers, the impact is transmitted through inflation, fuel shortages, exchange rate fluctuations, and social tensions; for exporters, it is the risk of being unable to actually sell oil, demand collapse, and the threat of global recession."
Attempts to mitigate the shock have already begun: the largest-scale strategic reserve release in history, discussions to increase supply from alternative sources, and looking for alternative routes. However, the expert said that there is no guarantee of quickly resolving the crisis: "A short-term easing scenario is still possible, but it should not be seen as inevitable."
The longer the blockade lasts, the higher the probability of oil prices reaching $150, and the greater the possibility of prices climbing to $180–200.
"In the current environment, any scenario is absolutely possible," said Nikita Duchenko, analyst at the financial group Finam. "We believe that the alliance will try to end the conflict within the next month. At least based on the scale of the strategic reserve release by the International Energy Agency and some statements, countries are not planning to deal with a prolonged scenario. However, there may be a typical planning cognitive bias, where the time required to achieve the goal is much longer than initially reserved."
He said that although it was previously thought that Donald Trump was unlikely to take this step, the possibility of a ground operation against Iran is now increasing. Analysts believe that the current situation leaves no choice. "This ground operation may be limited in scope — trying to control the strait itself, without touching other parts of Iran. Regardless, this is an escalation, which will further push up oil prices," Duchenko concluded.
Original: toutiao.com/article/7620068577604944419/
Statement: This article represents the views of the author alone.