Oil prices are expected to climb as the conflict with Iran threatens supply routes through the Strait of Hormuz. Analysts now see an 18.5% chance that crude will hit a new all-time high by December 31. The risk of disruption in the narrow waterway is the main driver.
Why the Strait of Hormuz matters
The Strait of Hormuz is a critical chokepoint for global oil shipments. About 20% of the world's petroleum passes through it daily. Any military escalation in the region could force tankers to reroute or halt, cutting off supply. That scenario is what traders are pricing in now.
What the 18.5% probability means
That number comes from market models that weigh the chance of a major supply outage. It's not a forecast—it's a risk assessment. If the conflict stays contained, prices may ease. But if it widens, the probability could jump fast. The current odds are the highest they've been in months.
Investors are watching for any new military moves or diplomatic breakthroughs. The next few weeks will be key. If the Strait stays open and no major attack happens, the probability will likely drop. But if the conflict escalates, a new record becomes a real possibility.
