“Oil prices should rise to $150 instead of $103!” Veteran oil trader: The US and Iran blocking the strait is too crazy.

The breakdown of US-Iran negotiations and imminent American naval blockade have sent oil prices soaring, yet veteran traders dismiss this as “seriously underestimated.”

Brent crude broke through $103 a barrel on Monday, rising nearly 8% from the previous session, after Washington and Tehran failed to reach agreement during weekend talks. US military forces will begin implementing the blockade plan at 10 a.m. New York time on Monday, covering all vessels entering or leaving Iranian ports.

Jorge Montepeque, Managing Director of Onyx Capital Group, told Bloomberg that current oil prices do not reflect the true impact of the blockade. He stated that if the US genuinely carries out a blockade of the Strait of Hormuz, oil prices should rise to $140–$150 a barrel, not around the current $100 level.

The blockade may trigger a global supply crisis

Jorge Montepeque warned that the US blockade will turn a regional conflict into a potential global crisis. He estimated that the move could interrupt up to 12 million barrels per day of oil supply.

“The numbers we saw this morning—$103, up 8%—do not reflect what could really happen if the US pushes forward with intercepting action,” he said on Bloomberg TV. “It makes no sense at all; it should be $140, $150 a barrel.”

He further noted that oil price response during Asian trading hours was relatively calm, in part because traders find the idea of a simultaneous blockade on both sides of the strait “too crazy” to believe.

Trader: The US is "losing sight of the big picture"

Jorge Montepeque was blunt about US policy direction. In the interview he said: “One word: madness. The US is so fixated on Iran it’s ignoring the harm it’s causing to the world. Asia is suffering, the South Pacific is suffering, all countries dependent on oil are suffering.”

He believes the impact of the blockade plan will far transcend the regional scope, with Asian economies highly dependent on crude passing through the Strait of Hormuz being hit especially hard.

Despite strong warnings, Jorge Montepeque also offered a relatively mild baseline scenario: If Trump chooses to scale back some actions and the situation cools down, oil prices may remain around $100 a barrel for the rest of the year.

Risk Warning and DisclaimerThe market is risky, and investment requires caution. This article does not constitute personal investment advice, nor does it take into account individual users’ specific investment goals, financial situation, or needs. Users should consider whether any opinions, views, or conclusions in this article fit their particular circumstances. Acting on this information is at your own risk.