Expert Warns Crude Could CRASH Despite Middle East Tensions — Here's Why Petrol Prices May Plunge

Crude oil prices may be set for a significant correction as the market begins to look past the geopolitical noise surrounding the conflict in the Middle East. While months of regional instability have kept global fuel costs elevated, a growing consensus among analysts suggests that the recent price spikes were driven more by fear than by actual supply shortages. Investors are now turning their attention back to fundamental indicators, raising hopes that the sustained pressure on petrol prices could finally begin to ease.

The prevailing view among market strategists is that the global energy market is undergoing a structural shift. Rather than reacting to every headline from the region, the focus is narrowing to the physical reality of supply chains, specifically, whether crude can continue to navigate the critical chokepoints of the global trade network.

Why Oil Could Fall Despite Lingering Risks

Analysts are increasingly confident that oil prices could ease, as they believe fear, not an actual crude shortage, was the main force behind recent price spikes.

According to a CNBC interview with Aarthi Chandrasekaran of SHUAA Capital on 29 June, as concerns over supply disruptions begin to ease, that extra 'risk premium' built into oil prices is gradually disappearing, pulling crude back toward levels supported by market fundamentals. Supply is also reportedly expected to improve over the coming months. While shipping delays and higher insurance costs continue to affect some cargoes, analysts say additional barrels, including exports from Iran if flows continue to recover, could help offset those disruptions.

Governments have relied on strategic petroleum reserves to cushion the market, preventing the severe shortages many investors initially feared. Meanwhile, demand is not expected to ricochet as strongly as producers might hope.

With global consumption forecast to grow only modestly through the rest of the year, analysts believe the combination of improving supply and restrained demand could keep crude trading in a relatively stable range, reducing the likelihood of another sharp jump in petrol prices unless a major disruption occurs.

Strait of Hormuz Holds Key to Oil Prices

The biggest risk to oil prices is not simply the Middle East conflict but whether crude can continue flowing through the Strait of Hormuz, according to energy experts. The waterway carries a significant share of the world's oil exports, which means any long-lasting disruption could quickly cause supplies to tighten.

As long as tankers continue to pass through the Strait of Hormuz safely and confidence gradually returns, oil prices are expected to remain under control rather than forecast another surge.

The strategist in the CNBC interview expects crude to trade around $70 to $75 a barrel in the coming months, with prices potentially staying within a $70 to $80 range during the second half of 2026. Though shipping, insurance, and logistics issues are still working their way through the market, those challenges are viewed as temporary rather than an incident sufficient to trigger another rise.

'Whatever we have seen in oil in the last couple of months was all because of the geopolitical risk premium, because we have seen a lot of countries actually using the strategic reserves and keeping the oil supply going on. So it was a geopolitical risk premium, which actually took the oil from probably $70 to $110, and we are seeing the unwind of the geopolitical risk premium,' Aarthi Chandrasekaran of SHUAA Capital told CNBC.

Chandrasekaran also reiterated that the oil market is still expected to remain relatively tight during the third quarter as supply chains continue adjusting after recent disruptions, but she suggested that additional Iranian exports could gradually return to international markets, helping offset some of that pressure as the year progresses.