Experts warn that renewed conflict in the Middle East, coupled with limited reserves and extended supply routes, could trigger a sharp spike in global oil prices later this year amidst rising geopolitical tensions and market fragility.
Oil markets may be entering a more dangerous phase after the latest Middle East flare-up, with Ron William of RW Advisory warning that tensions around the Strait of Hormuz, limited spare supply and stretched positioning could combine into a sharp price shock later this year. Speaking on Financial Sense, William said the market had absorbed the first jolt but still faces a second-wave risk if the conflict broadens or energy infrastructure is hit.
The strategic importance of the Strait of Hormuz underpins that warning. The US Energy Information Administration says roughly 20 million barrels a day moved through the waterway in 2024, about 20% of global petroleum liquids consumption, while the International Energy Agency puts 2025 flows at around 20 million barrels a day, or a quarter of the world’s seaborne oil trade. Both agencies note that even a temporary disruption could delay supplies, raise shipping costs and lift global energy prices.
William argued that the market is underestimating how little cushioning remains if supply is interrupted again. He pointed to historically low strategic reserves, elevated refining margins and renewed regional pressure points beyond Hormuz, including the Red Sea. In his view, those conditions make it easier for any fresh escalation to turn into a broader inflation problem, not just a short-lived energy move.
He also linked the oil outlook to a wider macro backdrop that includes higher bond yields, fragile risk appetite and seasonal weakness late in the summer. In the interview, William said Treasury yields have broken into a new range and that the dollar looks vulnerable as capital rotates away from crowded positions. He favours a more selective approach, with energy, gold, copper and agriculture among the assets he believes are best placed if inflation proves stickier than markets expect.
Gold, in his assessment, has also been pulled into the same rotation. After a sharp pullback from its highs, William said the metal appears to have found support and that miners are still near a long-term breakout point. The broader message, he said, is that investors should treat the coming months as a period of heightened volatility rather than rely on passive exposure.
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