Major analysts predict oil prices if Strait of Hormuz blocked originally appeared on TheStreet.

The world has gotten a bit crazy in 2025.

An ongoing global trade war has sparked worries about worldwide economic growth, and now Israel and Iran are locked in a battle with missiles flying back and forth, threatening global oil supplies.

The potential for a major energy crisis to develop because of the Iran-Israel conflict has caused Brent Crude and West Texas Intermediate oil prices to surge, and in turn that's created an entirely new threat to the economy.

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The potential for the battle in the Middle East to spread, potentially shutting off oil seaborne transports through the Strait of Hormuz and possibly removing Iranian oil from the global market, has lifted Brent crude and WTI crude per-barrel prices by 18% to $79 and 21% to $75 this month.

The situation has captured the attention of Citigroup, JP Morgan and Goldman Sachs oil analysts, leading them to reset their oil price targets.

President Donald Trump this year has unveiled a string of harsher-than-expected tariffs to rekindle US manufacturing.

The moves, which include 25% tariffs on Mexico, Canada and autos, plus a 30% tariff on China and a 10% baseline tariff on all imports, have forced economists to rethink their global projections for economic growth this year.

Related: Forget tariffs, Fed interest rate cuts may hinge on another problem

For instance, earlier this month the World Bank reduced its worldwide gross domestic product forecast to 2.3% from 2.7%, citing tariff uncertainty.

Contributing significantly to the reduced outlook is a major downgrade of U.S. growth to 1.4% from 2.3%. The World Bank lowered its U.S. forecast for 2026 to 1.6% from 2%.

The Federal Reserve also expects slowing growth in the US because of tariffs' bite.

The Fed updated its closely watched Summary of Economic Projections on June 18. It expects unemployment to increase to 4.5% from 4.2%, and projects that Personal Consumption Expenditures inflation — its favored inflation benchmark — will climb to 3% this year from expectations in March for 2.7% inflation.

Fed officials expect U.S GDP growth to be just 1.4% in 2025, down from 1.7% in March, and well below the 2.5% growth the US economy delivered in 2024.

In China, the World Bank expects slowing activity due to higher tariffs to reduce GDP growth to 4.5% in 2025 from 5% in 2024. In 2026, it expects GDP growth to ease to 4%.