Saudi Arabia warns oil could hit $180 a barrel

Saudi Arabia is bracing for an increasingly tense scenario, oil sector sources say. If the war with Iran and disruptions to energy supplies continue beyond April, oil prices could climb above $180 a barrel, the Wall Street Journal reports.

While this would on the surface bring significant revenues for the kingdom, there are growing fears that such a development could seriously disrupt the market. Excessively high prices tend to alter consumer behaviour, prompting households to cut back on consumption, reduce travel or seek alternatives.

The key factor remains the Strait of Hormuz, through which around a fifth of the world’s oil passes and which is currently heavily affected by attacks. The market is already reacting with sharp price rises, and traders are increasingly betting on further gains.

At the same time, higher fuel costs are beginning to take a significant toll on households and businesses in the US, Europe and Asia.

According to analysts, a paradox is emerging: the higher prices rise, the greater the risk that demand will begin to weaken, potentially leading to increased market volatility.

(pir)