How high will the price of oil go? | The Business | ABC NEWS

US President Donald Trump may have declared victory, but markets aren't paying attention. Oil prices surged and stocks sank after his address to the nation, raising questions over where the oil ceiling may be. CBA Head of International Economics, Joe Capurso, says the oil price could exceed $150 a barrel in a worst case scenario. He says "the war has three participants, and if the Iranians and the Israelis keep going, then the war will keep going ... and what matters most for the world economy is the Strait of Hormuz and whether oil and gas is able to pass through it."

Compared to previous crises, the market reaction has been muted. Oil prices are well below the peak following Russia's invasion of Ukraine, and adjusted for inflation, it's nowhere near the spike after America's attack on Libya more than a decade ago.

Barely a handful of tankers have transited the Strait of Hormuz in the past month. With so many vessels trapped in the Persian Gulf, the transport shortage has seen shipping prices surge. Shipping oil out of the US is now three times more expensive than a month ago. Add to that processing costs. Refiners have trebled profit margins on petrol in the past month and quadrupled jet fuel. Even if the war ended tomorrow, it would take months and possibly years to return to normal.
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