Bank of America warns: If the Strait of Hormuz cannot reopen within a few days, oil prices could soar to $200.

Francisco Blanch, head of commodities and derivatives research at Bank of America Securities, recently issued a stern warning that the strategic chokepoint connecting the Persian Gulf to global markets - the Strait of Hormuz - must be reopened in a matter of days, not weeks. Blanch pointed out that if the strait remains closed for several months, the global economy will inevitably slide into a deep recession, with prices of Brent crude and WTI crude likely skyrocketing to over $200 per barrel. The core logic behind this extreme forecast lies in the deep mismatch between energy supply gaps and global growth patterns. Blanch explained that for every 1 percentage point increase in global Gross Domestic Product (GDP), there is typically a corresponding need for a 1 percentage point increase in energy supply to support it. According to current monitoring data, the supply gap resulting from the conflict in Iran and the blockade of the strait has already reached 8 percentage points. Blanch emphasized that to prevent a global economic recession, two key factors must be addressed: protecting critical energy infrastructure from further attacks, and immediately reopening the Strait of Hormuz. He explained that unless energy supply can quickly recover, the market will have to resort to "demand destruction" through suppressing production and consumption to balance scarce resources with extremely high price leverage. It is understood that this crisis has already triggered widespread industrial and agricultural chain reactions beyond the oil market. Blanch pointed out that in the petrochemical sector, some factories in Asia have already halted operations, the Philippines has shifted to a four-day work week, Thailand has instructed workers to work from home, and GTL plants related to fertilizer production have come under attack overnight, adding extra pressure to agriculture. Additionally, aluminum, as the most energy-intensive metal, is particularly vulnerable to the impact of soaring energy prices. While the United States, as a net energy exporter, is relatively less affected, Blanch warned that the situation for American consumers remains "fragile." Dubai crude prices have surged to $170 per barrel, and Japan's natural gas prices have reached $26 per million British thermal units, but the US is implementing measures such as exempting the Jones Act to mitigate the impact on American consumers. Blanch's basic assumption is that the conflict can be resolved relatively quickly, but he cautioned that if the crisis continues, prices will continue to rise. "Once the market believes this will be a months-long affair, we could see oil prices surge to over $200 per barrel," he added, noting that if interrupted supplies cannot be restored, very high prices will have to be maintained to continue rationing global demand. Currently, due to the escalating tensions between the US and Iran, shipping in the Strait of Hormuz has come to a virtual standstill, with over 150 oil tankers and cargo ships forced to anchor outside the strait. This situation has triggered collective anxiety among major global financial institutions, with market panic spreading continuously. In a recent briefing, J.P. Morgan warned that the closure of the strait is not just a simple inflationary fluctuation, but a structural shock capable of causing global economic stagnation. Scenario analysis by Deutsche Bank shows that if the blockade leads to substantial damage to energy infrastructure, the theoretical projection of oil prices surging to $200 will become a reality. While some government officials, such as US Energy Secretary Chris Wright, remain cautious about whether oil prices will actually reach the $200 mark, market uncertainties have already seen Brent crude prices surge past $110 in a short period, with a 40% increase. According to institutions like Goldman Sachs, if oil prices remain at $150 to $170 in the spring, the current monetary policy framework will face risks of becoming ineffective. Currently, global investors are focused on the progress of the strait's reopening, as it is not just the aftermath of a regional conflict, but a life-or-death test for the resilience of global economic recovery.