West Asia War: Iran escalation signals end of ceasefire; crude may hit $150, says Iman Nasseri

Escalating tensions between the United States and Iran may have effectively brought the fragile ceasefire to an end, with crude oil prices at risk of surging as high as $150 a barrel, according to Iman Nasseri, Managing Director of Middle East Research at FGE NexantECA.

Speaking to CNBC-TV18, Nasseri said the latest Iranian strike targeting the UAE and vessels moving through the Strait of Hormuz marks a decisive escalation. “This is the most obvious breach of the ceasefire since it was first announced on April 8,” he said, adding that the development could signal that “we may already be at the end of the ceasefire and potentially entering round two.”

The renewed hostilities have already unsettled oil markets, with prices reacting sharply to the increased geopolitical risk. Nasseri noted that crude has seen an immediate jump of about $5, while investors remain in a wait-and-watch mode to assess whether the situation deteriorates further or stabilises.

He warned that disruptions in the Strait of Hormuz are likely to persist, regardless of whether full-scale conflict resumes. “Over 90% of flows are currently disrupted, with only 5–10% at best still moving,” Nasseri said, underlining the severity of the supply shock. In such a scenario, he expects oil prices to remain elevated in the $120–$150 range through May, with spikes possible if key supply infrastructure is hit.

Even under a more optimistic outlook where some flows resume in the coming months, Nasseri does not expect a full recovery. According to him, throughput may not exceed 60% of pre-war levels by the end of the year, keeping prices structurally higher. A gradual easing could bring crude into the $80–$100 range, but only if multiple conditions are met and disruptions begin to ease meaningfully.

The escalation comes amid heightened geopolitical tensions in the Gulf. Iran’s alleged drone and missile strike on the UAE has drawn sharp condemnation from the United States and several global powers. Donald Trump warned that Iran would be “blown off the face of the earth” if it targets US ships in the Strait of Hormuz, signalling a hardening stance from Washington.

Countries including Qatar, Saudi Arabia, Kuwait, France, Germany, and the United Kingdom have also condemned the suspected attack, raising concerns about a broader regional conflict. The Strait of Hormuz, a critical artery for global oil supplies, has been at the centre of the standoff, with fears that disruptions could last longer than previously anticipated.

The impact is already visible in oil markets. Brent crude has climbed above $110 per barrel and is up nearly 50% since the conflict began in late February. Analysts attribute the rally not only to current supply disruptions but also to growing fears of further damage to oil infrastructure and prolonged restrictions on shipping through the Strait.

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Nasseri also flagged emerging signs of demand destruction as high prices and supply shortages begin to weigh on consumption. He said the current situation differs from past demand shocks, noting that this time demand is being curtailed by lack of supply rather than voluntary reductions. “When demand is forced down due to supply shortages, recovery tends to be slower,” he said.

He added that a contraction in oil demand is likely this year, a view that has also been echoed by the International Energy Agency, as the market adjusts to constrained energy availability across sectors.