$200 Oil No Longer Crazy Idea as Middle East Supply Collapses

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Summary

The post shares an article from oilprice.com arguing that a massive, sudden collapse in Middle East oil supply (7-10 million bpd) has created a severe physical shortage.
The author's thesis, derived from the article, is that this supply shock could drive crude oil prices to unprecedented levels, with analysts cited suggesting a range of $150 to $250 per barrel.
Quality assessment: This is speculation based on a news article reporting on a hypothetical geopolitical event. The analysis within the article is based on expert commentary and data regarding a specific, severe supply disruption.

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[https://oilprice.com/Energy/Oil-Prices/200-Oil-No-Longer-Crazy-Idea-as-Middle-East-Supply-Collapses.html](https://oilprice.com/Energy/Oil-Prices/200-Oil-No-Longer-Crazy-Idea-as-Middle-East-Supply-Collapses.html)

By [Irina Slav](https://oilprice.com/contributors/Irina-Slav/) \- Mar 18, 2026, 7:00 PM CDT

* Middle East oil exports and production have collapsed, removing over 7–10 million bpd from global supply and creating a severe physical shortage.
* Tight supply and limited storage mean prices could surge to $150–$200+ per barrel, with some analysts warning of extreme spikes if disruptions persist.
* Even if the conflict ends, recovery will be slow, and temporary relief won’t fully offset the shortage, keeping prices elevated.

A month ago, any analyst suggesting international oil prices could soar all the way to **$200 per barrel** would have been laughed out of the studio. Now, some are beginning to acknowledge that this is **a real possibility**, and with good reason.

Oil and fuel exports from the Middle East stood at 25.13 million barrels daily in February, Reuters reported this month, citing data from Kpler. By mid-March, this had **plummeted by close to two-thirds,** to 9.71 million barrels a day. Vortexa has even more worrying figures, putting the February daily average at 26.1 million barrels of crude and fuels, and the mid—March average at just 7.5 million barrels daily.

Yet even worse than daily shipments is the situation in production. Everyone in the Middle East is cutting oil production—and those wells take a while to restart. The reason they are cutting is that storage capacity is limited—and some of those “export” barrels are actually going on tankers for storage rather than shipment to clients. **A fifth of global oil, in other words, is severely disrupted, and even if the bombs stop flying tomorrow, it will take a while for things to get back to normal.**

Iraq has reportedly curbed oil production by some 2.9 million barrels daily, ING commodity strategists said in a note earlier today. In Saudi Arabia, the cuts are to the tune of between 2 million barrels daily and 2.5 million barrels daily. The UAE has reduced production by 1.5 million bpd, and Kuwait has slashed output by a reported 1.3 million barrels daily. That makes a total of over 7 million barrels daily gone.

For context, the **International Energy Agency had predicted the oil market would this year be in a surplus of around 3.7 million barrels daily.Not only is that now gone , but there is more supply frozen because of the crisis.** Indeed, the IEA itself estimates shut-in production at 10 million barrels daily.

What all this means is that **there is no physical oil to respond to demand.** And when physical supply is tight, prices fly high and take a while to go back down if the situation normalizes, even accounting for the destruction in demand that high oil prices would inevitably cause.

“We’re very much in the **$150 range** but I don’t think it’s ridiculous at all to \[suggest\] **$200.** It would be very fair given we are basically having a crisis-a-day right now equivalent to supply outages,” Onyx Capital Group CEO Greg Newman told CNBC this week, noting that the **Middle Eastern oil benchmark had already hit $150 per barrel amid the supply squeeze.**

“I wouldn’t be surprised if oil went to **200 bucks, or even 250,** because commodity prices go parabolic when there’s a shortage of supply,” the chief market strategist of Longview Economics, Chris Watling, told the news outlet.

Ideas

u/mastertofu Reddit r/stocks

Middle East oil production and exports have collapsed, removing 7-10 million bpd from global supply, creating a severe physical shortage. A physical shortage of this magnitude, far exceeding prior market surplus forecasts, will cause prices to spike dramatically as demand outstrips available supply. The massive supply shock from the Middle East justifies a long position on oil, as prices are expected to surge towards the $150-$250 per barrel range cited by analysts. A swift resolution to the conflict could restore supply faster than expected. High prices could lead to significant demand destruction, capping the upside. The reported supply cuts could be exaggerated or temporary.

u/mastertofu Reddit r/stocks

Crude oil prices are projected to surge to $150-$250 per barrel due to a massive supply disruption in the Middle East. Energy companies, particularly oil producers, will experience a dramatic increase in revenue and profitability from selling their output at these historically high prices. A long position in the energy sector is warranted to capitalize on the windfall profits that oil and gas companies will generate in a high-price environment. A rapid de-escalation of the conflict could cause oil prices to fall sharply. Governments could impose windfall profit taxes on energy companies, limiting their earnings potential. A global recession triggered by high energy prices could hurt demand.

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