Oil prices could reach $200 per barrel amid geopolitical risks — Olivier Blanchard

Global oil prices could climb to $200 per barrel amid rising geopolitical tensions and potential supply disruptions, according to former IMF chief economist Olivier Blanchard.

Market analysts warn that the current combination of risks, including instability in the Middle East and potential supply shocks, could trigger a sharp rise in energy prices. Such a scenario could significantly impact global inflation, energy markets, and economic growth.

Possible short-term pullback

Blanchard also suggested that oil prices could experience a temporary pullback based on the so-called TACO principle (Trump Always Caves) — a market term describing Donald Trump’s tendency to soften or reverse policy positions when market volatility intensifies.

Such political shifts could briefly stabilize energy markets.

Forecasts of potential oil shortages

Marco Kolanović, former head of quantitative research at JPMorgan, warned that a sharp oil price surge linked to tensions involving Iran may be difficult for financial markets to quickly absorb.

JPMorgan analysts estimate that a potential disruption in supply could lead to a global oil deficit of up to 16 million barrels per day.

Risks for the global economy

Analysts note that sustained increases in oil prices could drive higher energy costs, inflationary pressures, and slower economic growth worldwide.

At the same time, U.S. sanctions and geopolitical tensions are already encouraging some countries to develop alternative oil supply routes, which could reshape global energy markets in the coming years.