An oil market analyst has warned that crude prices could plummet to $40 a barrel if internal conflicts within OPEC+ intensify, creating a stark downside risk to the current market structure.
The scenario hinges on the resumption of oil traffic through the Strait of Hormuz, which has been disrupted since tensions involving Iran escalated in February.
With shipping lanes reopening, the immediate supply shock has eased, shifting the market’s focus from geopolitical scarcity to potential oversupply driven by producer disagreements.
The warning comes as crude prices have recently surged on fears of prolonged supply disruptions.
However, the analyst suggests that the return of Iranian exports, combined with a lack of coordinated output discipline among OPEC+ members, could flood the market.
This dynamic would strip away the geopolitical premium that has supported higher prices, exposing the underlying balance to a severe correction.