ExxonMobil CEO Darren Woods describes the effect of the Middle East conflict on the global oil market on ‘Special Report.’
If the escalating conflict between Israel and Iran significantly cuts supply in the global oil market, prices could surge to as much as $120 a barrel due to a potential threat to a significant shipping lane, according to industry experts.
The price of West Texas Intermediate, a key crude oil benchmark, is sitting around a one-year high, while global benchmark Brent Crude is nearing a five-month high Wednesday as the conflict between Israel and Iran enters its sixth day.
President Donald Trump met with his national security team Tuesday to discuss the escalating conflict, sparking speculation the U.S. could be preparing to join the attack, creating more volatility in the market, according to Ewa Manthey, commodities strategist at ING Financial Service.
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Smoke billows for the second day from the Shahran oil depot, northwest of Tehran, June 16, 2025. (Getty Images / Getty Images)
But Manthey said the “key worry for the market” is the potential for disruption to shipping through the Strait of Hormuz, a critical waterway that connects the Persian Gulf with the Gulf of Oman and the Arabian Sea. The waterway is not only wide enough to handle the world’s largest crude oil tankers. It is considered one of the world’s most important oil chokepoints, according to the Energy Information Administration (EIA).
ExxonMobil CEO Darren Woods echoed those concerns, saying that while global oil supply is sufficient to withstand a disruption to Iranian exports, the greater concern is the potential impact on oil shipments through that waterway, which moves almost a third of global seaborne oil trade.
A plume of heavy smoke rises from an oil refinery in southern Tehran after it was hit in an overnight Israeli strike June 15, 2025. (Atta Kenare/AFP via Getty Images / Getty Images)
In 2024, 20 million barrels of oil per day, about 20% of global petroleum liquids consumption, flowed through the waterway. There are also very few alternative options to move oil out of the strait if it is closed, according to the EIA.
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A significant disruption to these flows would be enough to push prices to $120 per barrel, according to Manthey. But if disruptions persist toward the end of the year, she noted that Brent could trade to new record highs, surpassing the record high of close to $150 per barrel reached in 2008.
President Donald Trump sent a letter to Iran’s Supreme Leader Ayatollah Ali Khamenei March 6, 2025, telling him to “make a deal” with the U.S. over its nuclear program or face the U.S. “militarily.” (Fox News Image using Getty Images / Getty Images)
“If this occurs, we would need to see governments tap into their strategic petroleum reserves,” Manthey said, noting that it includes the U.S., which sits on more than 400 million barrels of crude oil in its strategic petroleum reserves.
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Manthey said another solution would be if the Organization of the Petroleum Exporting Countries (OPEC+) tapped into its spare production capacity of more than 5 million barrels per day.
“While they are in the process of bringing supply back online, a disruption to Iranian supply may prompt them to bring this supply back at an even quicker pace,” Manthey said.
