The price of a barrel of oil could double to over $150 and this will drag down the global economy. This was warned by the Minister of Energy of Qatar.
Saad al-Kaabi told the "Financial Times" that the conflict in the Middle East could lead to a new energy crisis and "collapse economies around the world".
Oil is currently trading at around $85 a barrel. This comes after the price was around $60-65 per barrel for most of the year.
Kaabi stressed that such a rise would "collapse economies around the world".
"If this war continues for a few weeks, global GDP growth will be affected. The price of energy for everyone will increase. "There will be shortages of some products and there will be a chain reaction of factories not being able to deliver," he predicted.
The minister warned that Gulf energy exporters could halt production, which in turn would push up oil prices.
He said even if the war ended soon, it would likely take weeks or months for production cycles to return to normal.
This comes after a drone strike in Iran hit its largest liquefied natural gas plant earlier this week.
Oil is on track for its biggest weekly gain since 2022 as the conflict in the Middle East disrupts markets and raises fears of renewed inflation.
Brent crude oil pared earlier losses to above $85 a barrel this morning, but prices jumped nearly 20% this week. That followed a brief decline yesterday after the United States signaled its intention to curb rising prices with measures that include allowing the Treasury Department to trade oil futures.
The conflict in the Middle East has pushed energy markets lower as Iran effectively closed the Strait of Hormuz, a key shipping route.
Economists have warned that a prolonged surge in oil and gas prices could contribute to inflation and prompt central banks to tighten policy.
Qatar is the world's second-largest producer of liquefied natural gas (LNG). Although a large amount of Qatari gas is exported to Europe, Kaabi said Asian buyers would be looking to buy whatever gas is available.
That, in turn, will push up prices.