Oil could hit $150 if US proceeds with Hormuz blockade: Onyx Capital

Oil drilling rigs

Jorge Montepeque, an executive at Onyx Capital, expects oil prices to rise significantly above current levels if the US moves forward with its plan to impose a naval blockade on the Strait of Hormuz.

“The number we saw this morning — $103; 8% increase — is not reflective at all of what could happen if the US really decides to go with this interdiction,” Montepeque said on Bloomberg TV, “It really makes no sense. It should be $140, $150.”

The US blockade would transform a regional fight into potentially a global fight, with a supply loss of up to 12 million barrels a day, Montepeque said. Traders found it “too crazy” for both sides of the strait to be blocked, hence the relatively calm price reactions during the Asian session, he added.

Oil prices may be around $100 a barrel for the rest of the year if Trump dials back some of his actions, according to Montepeque.