Corporate Executives Sound the Alarm! If the Strait of Hormuz Crisis Isn't Resolved Within Two Weeks, Oil Prices May Soar to $175, and a Real Crisis Could Erupt

As international oil prices soar to multi-year highs, the Strait of Hormuz is effectively blockaded, and supply chains across multiple global industries are taking a hit, concerns among top executives about future risks are rising rapidly. The U.S. business community is increasingly worried that the truly worst-case scenario may not have arrived yet.

United Airlines CEO Scott Kirby said on Friday (March 20) that the company is preparing for oil prices at $175 per barrel and is assuming oil prices could remain above $100 until 2027. He admitted that this forecast may not ultimately come true, but given the current situation, businesses must at least start to treat it as a realistic possibility and plan accordingly.

In recent years, corporate executives have gradually adapted to a business environment where "new uncertainties keep coming one after another." However, the scale and potential duration of the impact a possible U.S.-Iran war could bring is still making Wall Street and C-suite leaders noticeably uneasy. President Trump’s continued ambiguous signals about when the war might end have only added to the market’s anxiety. On Friday, the Nasdaq entered a technical correction, U.S. stocks fell for the fourth consecutive week, and worryingly, not only did risky assets weaken, but even traditional safe-haven assets like gold and U.S. Treasuries also fell in tandem.

Executives Are Closely Watching the “Two-Week Window”

As the situation deteriorates, the U.S. government and military are ramping up their response. On Thursday, the Chairman of the Joint Chiefs of Staff said the U.S. military is "searching for and destroying" small Iranian boats being used to block the strait. Trump also escalated his rhetoric regarding the Strait of Hormuz, warning last Saturday that Iran must reopen the strait within 48 hours or the U.S. would target Iranian power plants. Meanwhile, more U.S. allies have expressed willingness to support actions to protect maritime transit, although no specific plans have yet been formed. Trump also stated last Friday that the Strait of Hormuz "must be guarded and managed by the countries that use it as needed—the United States should not bear this responsibility."

Iran responded on Sunday by saying that if its electricity infrastructure is attacked, the Strait of Hormuz would be "completely closed."

But for U.S. corporate executives, the most immediate concern is not political statements, but time. The current consensus among several CFOs is that the Trump administration and its allies have roughly a two-week window to restore shipping through the Strait of Hormuz. If no progress is made in that period, businesses will be forced to assume the conflict will last until at least mid-year and fully prepare for the negative shocks this would bring to the global economy.

This assessment comes from a recent conference call held by the CNBC CFO Council earlier this week. At the meeting, Again Capital energy and commodities market expert John Kilduff briefed multiple CFOs on oil price expectations coming from traders and investors.

The Energy Industry Is Already Simulating the Worst Outcomes with “Three Scenarios”

Of all sectors, the energy industry is undoubtedly the most directly affected by this war. One CFO from an energy company who attended the conference call revealed that his firm is currently scenario-planning around three possibilities: first, the Strait of Hormuz reopens before the end of March; second, it reopens around mid-year; and third, in the worst-case scenario, the closure lasts until the end of the year.

However, this energy sector CFO also admitted that it's very difficult at this stage to accurately judge which scenario is more likely, so management is forced to focus on "what is the worst result" when making decisions.

This concern about the ever-shrinking time window is not limited to the energy sector. A CFO from the tech industry in the same conference call said that even if a company is not directly reliant on oil prices, it cannot ignore their indirect effects. For a global company, these shocks mean that many regions worldwide will face pressure, especially the Middle East and rapidly growing economies such as Saudi Arabia, Dubai, and the UAE.

This technology executive noted that although his company mainly sells products and services to corporate clients, "consumer demand ultimately affects enterprise demand, and that directly impacts our business." He also voiced the market’s central question: "How long can this situation really last?"

Traders Warn: If It Drags Past April 1st, the Oil Market Will Enter a New Round of Repricing

Again Capital's Kilduff said that the scenario-planning inside energy companies' boards is highly aligned with current market thinking among traders. He pointed out that the market is also closely eyeing the “reopen before the end of March” node, which is only about two weeks away.

Kilduff explained that the market is in an extremely critical time window, as the military has now clearly focused its attention on the Strait of Hormuz. It remains to be seen how the situation develops, but if by April 1 the market is still facing the prospect of conflict lasting into mid-year, oil prices will move into a new phase of repricing, with WTI crude rising clearly above $100, and the market starting to worry more seriously about supply shortages, especially in Asia.

He stressed that the real market risk point is after April 1. If by then there is still no solution, no clear action plan, and not even a hint of hope for restoring navigation, the situation will truly escalate into an energy crisis.

Strategic Reserves and Policy Tools Can’t Fill the Supply Gap

Although Japan, the U.S., and other countries have started to release strategic oil reserves, and the U.S. now has the capacity to release over 1 million barrels of oil per day, Kilduff believes these measures are far from enough to cope with the scale of the current supply disruption over the long term.

He pointed out that if the Strait of Hormuz is blocked for the long term, the market will face a daily supply gap of 10 to 12 million barrels—a scale that is "almost insurmountable." In his view, there are no policy tools or administrative levers sufficient to make up for such a massive supply deficit.

Kilduff further warned that if the situation hasn't eased by mid-year, actual shortages will begin to hit places like India, Japan, and South Korea, forcing them to cut back on industrial production to prioritize basic energy needs: "They will have to maintain electricity supply through conservation."

He was blunt: if by April 1 the U.S. military and government still cannot come up with an effective response, then the real "moment of tightening" will be upon us.

The U.S. Is Relatively Safe in the Short Term but Will Face Increased Risk by Year-End

However, Kilduff also noted that in the short term, the U.S. itself faces relatively low risk. Although the diesel market has already begun to tighten noticeably, with diesel prices rising even more than crude and gasoline, overall U.S. supplies remain relatively adequate for now.

But he also cautioned that if the crisis lasts into year-end, even the U.S. will face "a major energy crisis." He believes that at that point, areas like California are very likely to experience actual supply shortages.

On some of the current U.S. domestic measures being discussed to suppress oil prices, such as suspending fuel taxes, Kilduff thinks such policies could be "counter-stimulative" to a certain extent, because essentially they support demand, whereas in the current situation, the market actually needs to use demand destruction to stabilize or even lower prices to alleviate the shock for consumers.

$100 Oil May Soon Become the “New Floor”

From Kilduff’s perspective, the only reason WTI oil prices are still hovering around $100 and Brent is contained in the $105-110 range is that the market is still betting the crisis might soon be resolved.

But if this stalemate lasts for more than two weeks, oil supply valuations will be pushed significantly higher. He warned: "We’re standing on the threshold where $100 becomes the new floor." If there is still no tangible progress toward restoring safe passage through the Strait of Hormuz in the next week or two, the market will stop giving a “hope premium” that things will improve, and the shock of lost supply will start to really hit home.

In the longer term, even if the Strait of Hormuz issue is eventually resolved, the geopolitical risk premium in oil prices may not quickly disappear. That’s because countries across the Middle East have been forced to cut production, local energy infrastructure is persistently damaged, and returning to pre-war output will take time—especially as the bigger the destruction from the conflict, the longer the repair period.

For example, the CEO of QatarEnergy recently told Reuters that if Iranian attacks damage the 17% of liquefied natural gas export capacity owned by Qatar, the facilities might take three to five years to fully repair.

Kilduff also pointed out that if the U.S. or Israel further attack Iran’s oil export facilities, Iran is likely to retaliate asymmetrically against neighboring countries' oil production facilities—the UAE, being close and a relatively easy target, faces particular risk here.

He stated that Iran’s current strategy seems to have shifted to "dragging everyone into the water." If news breaks that Iran successfully hits key energy infrastructure in Saudi Arabia, Kuwait, or Iraq, oil prices would "instantly jump by $20," and traders would switch to a "buy first, ask questions later" mode.

The Business Community Is Holding Its Breath for Answers

Finally, Kilduff said that even if the situation eases in the future, any retreat in oil prices will be a cautious and slow process. Since fundamentals have changed and risk conditions have deteriorated significantly, it will become much more difficult for crude prices to return to the $70 or $60 per barrel range.

But before all these long-term questions, the first challenge is the next two weeks. He said that as Trump and the U.S. military recently have both turned their focus to the Strait of Hormuz, the market really wants to know: Can there be a breakthrough in this crisis in the next two weeks?

"We’re all holding our breath right now," he said. "You can use any metaphor to describe the current feeling—it’s like those disaster movies where you see a giant wave about to crash over you, but you still don’t know if you can get away in time."