What is the projected oil price if both Red Sea and Hormuz Strait close?

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Oil Price Projection Under Dual Chokepoint Closure

If both the Red Sea and the Strait of Hormuz are effectively closed to maritime traffic, the price of oil could eventually exceed US$160 per barrel. This projection highlights the significant vulnerability of global oil supply routes to geopolitical instability in the Middle East.
Red Sea and Strait of Hormuz Significance

The Red Sea and the Strait of Hormuz are critical chokepoints for global oil transportation. Saudi Arabia, for instance, has utilized a pipeline route to the Red Sea port of Yanbu as an alternative for exporting oil since the Strait of Hormuz faced closure. This workaround allowed for the export of approximately three-quarters of its pre-conflict levels.
Impact of Potential Closures

The threat of attacks on vessels and blockades in the Red Sea could render this alternative route less viable. Economic advisory firm Oxford Economics has expressed concerns that a combined closure of both the Red Sea and the Strait of Hormuz would significantly disrupt oil exports. This disruption is compounded by the fact that much of the world's spare production capacity has already been utilized.
Depleted Reserves and Market Buffers

Adding to the precarious situation, strategic and commercial oil inventories are currently lower than at the onset of recent conflicts. This reduction in reserves means the global market has fewer buffers to absorb prolonged supply disruptions. Consultancy Rysted Energy noted that this leaves markets with less room for manoeuvre in the face of such events.

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What is the projected oil price if both Red Sea and Hormuz Strait close?

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