Crude oil prices could skyrocket towards $250 a barrel if Iran follows through on a threat to close the Straight of Hormuz on the edge of the Persian Gulf in retaliation to the US threat to blocks its oil exports, RT reported on July 11.

Russian trader, Artem Avinov said that if the straight was blocked, the surge in oil prices would surpass all other crises and hit the $250 mark. Closing the straights would in effect remove some of 17mn barrels a day from the international market and could provoke a war.

Like the Bosphorus straights at the entrance to the Black Sea, the pinch point the Straight of Hormuz represent in the Persian gulf are so important as closing them effectively cuts the United Arab Emirates and Iraq off from access to international waters as well as the port facilities on the Saudi eastern seaboard. The strangle hold Iran has over these important transport routes is part of the US objection to the regime in Tehran.

However, the expert said closing the Straight of Hormuz was a worst-case scenario and instead said Iran would act in different ways to protect its interests.

Another analyst from Global FX, said he expected prices to hit $160 a barrel in the event of a Hormuz blockade, following a warning from the Iranian Revolutionary Guards that they might close the chokepoint as it must be “for all or for no one,” as reported by news agency Tasnim.

Following the Iranian comments on Hormuz oil prices jumped. By midday Central European Time on July 11, Brent was trading at $76.85. US president Donald Trump has also threatened to replace Iran’s roughly 2mn b/d of oil production with Saudi Arabian oil. Those calls panicked the market and the price has been higher than its six-month average of around $60 in recent days. However, Brent fell 2.55% by 12:00 CET.