Oil prices poised for steep decline as war eases and supply surges
The author warns that after the Iran-Israel conflict, oil prices are likely to tumble sharply as shipping resumes and new production comes online.
The column links the February U.S.-Israel strikes on Iran to a temporary oil price surge, but predicts a rapid collapse once the conflict subsides and tanker traffic normalises. Drawing on past collapses in 1986, 2008 and the Covid era, the author suggests prices could fall to $30 a barrel or lower, a level that would cripple U.S. shale and conventional producers whose costs are above $60. A senior commerce official is quoted as wanting gasoline at $2 per gallon, implying crude at $30-40.
Global supply is set to rise as projects in Guyana, Argentina, Venezuela and a possible re-entry of sanctioned Russian oil come online, while demand is already down by 2.5 million barrels per day. The piece also highlights the accelerating shift to renewables and the broader economic risks of a price crash for oil-dependent economies.
Why it matters
A sharp oil price fall could destabilise U.S. producers, reshape global energy markets and accelerate the move to renewables.
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