Saudis Warn Oil Going to $250, Gasoline to $25 at Pump

Saudis Warn Oil Going to $250, Gasoline to $25 at Pump

Global energy markets are facing the possibility of a dramatic price surge, as officials in Saudi Arabia caution that crude oil prices could climb to $250 per barrel—or even higher—if supply disruptions linked to tensions with Iran continue beyond late April.

At such price levels, fuel costs in the United States could exceed $25 per gallon, based on current estimates.

Energy projections referenced by Gulf officials and Saudi Arabia’s national oil company suggest that their baseline outlook now assumes extended interruptions to critical shipping routes and infrastructure. These concerns were highlighted in a recent report.

Although higher oil prices could boost Saudi revenues, authorities are growing increasingly concerned about the wider economic fallout. A sharp rise in prices could weaken demand and potentially push the global economy toward recession.

The warning comes at a time when Brent crude has already climbed to roughly $179 per barrel, following a series of attacks targeting energy facilities across the Gulf region.

Market analysts point out that oil prices have risen by around 50% since tensions escalated in late February, largely due to a significant reduction in global supply—amounting to millions of barrels per day.

One of the main factors behind the surge is the disruption of shipping through the Strait of Hormuz, a vital route for global oil transportation.

Before the conflict intensified, Saudi Arabia alone transported up to 6 million barrels of oil per day through this narrow passage. With access now severely restricted, other major producers in the region—including Iraq, Kuwait, and the United Arab Emirates—have also been forced to cut exports due to limited alternative routes.

To offset some of the disruption, Saudi Arabia has redirected part of its oil supply through its East-West pipeline, which connects to the Red Sea port of Yanbu. Shipping data suggests that exports from Yanbu could reach a record 3.8 million barrels per day this month.

Despite these efforts, alternative routes are unable to fully compensate for the volumes previously shipped through the Strait of Hormuz.

The situation has been further aggravated by ongoing attacks on refining and processing facilities, which continue to limit production and intensify concerns about prolonged supply shortages.

In response, oil traders are preparing for extreme outcomes. Activity in options markets indicates growing expectations that prices could rise to $210, $220, or even $250 per barrel in the near term.

The conflict is also beginning to affect natural gas markets. Attacks linked to Iran on a major liquefied natural gas (LNG) facility in Qatar—one of the world’s leading exporters—have increased fears of significant supply disruptions.

Any extended interruption in Qatari LNG exports could have serious consequences for Europe and Asia, regions that depend heavily on imported gas.

The combined pressures of restricted oil supply, damaged infrastructure, and potential gas shortages are raising concerns about a broader global energy crisis.

Central banks have already started to warn about the economic risks. U.S. Federal Reserve Chair Jerome Powell stated that persistently high energy prices could slow economic growth while simultaneously increasing inflation, creating a difficult challenge for policymakers.

Saudi officials are also cautious about the long-term implications. Oil prices approaching $180 per barrel could lead consumers to reduce usage permanently, accelerate the transition to alternative energy sources, and adopt behavioral changes such as cutting travel or working remotely.

Over time, these shifts could weaken long-term demand for crude oil.