Capital Economics predicts that oil could reach $150 per barrel by 2027 in a worst-case scenario.

Capital Economics indicated that in a severe situation where the Iran conflict intensifies, Brent crude prices might exceed $150 a barrel and stay near that figure until the end of 2027.

In a report issued on Thursday, the bank mentioned that due to the uncertainty surrounding the Iran situation, they have developed two forecast scenarios: a baseline where energy flows resume quickly and a negative scenario where additional harm to energy infrastructure pushes oil prices to $130 per barrel mid-year before gradually decreasing.

In a severe scenario that surpasses the bank's baseline and negative projections, with Brent expected to hover around $150 per barrel into 2027, it anticipates that headline inflation for advanced economies could increase by approximately 2.5 percentage points in the latter half of that year on average.

Oil prices rose over 3% on Friday following U.S. President Donald Trump's comments about his dwindling patience with Iran, heightening concerns over the stalled progress on a peace agreement to resolve ship attacks and seizures in the Strait of Hormuz.

Brent crude futures increased by 3.4% to $109.29 a barrel as of 0944 GMT, while U.S. West Texas Intermediate futures rose 3.7% to $104.88.

Should the Strait remain closed and OECD oil inventories continue to decline at the rate observed in April, stocks could drop to critically low levels by the end of June, potentially driving Brent prices to at least $140 per barrel, as noted by Capital Economics.

Additionally, if there is an unusual rise in cooling-related LNG demand in Asia during the summer and an unexpectedly cold winter in Europe increases heating demand, TTF prices could realistically average around 100 euros per MWh.