Citigroup stated that if the Strait of Hormuz is closed, oil prices could soar to $90 a barrel.

Gate News bot reports that according to Bloomberg, Citigroup stated that if the Strait of Hormuz is closed, Brent crude prices could soar to around $90 per barrel, adding that shipping through this key waterway is unlikely to stop for an extended period.

“Any closure of the strait could lead to a sharp rise in prices,” analysts Anthony Yuen and Eric Lee wrote in a report, citing the bank’s current optimistic forecast. “However, we believe the closure should be short-lived, as all efforts will be focused on reopening, so it shouldn’t last for months.”

The Strait of Hormuz is a narrow waterway at the entrance to the Persian Gulf, through which about 20% of the world’s daily oil production passes, including oil from major OPEC oil producers Saudi Arabia and Iraq. Citigroup’s forecast indicates that there will be a disruption of about 3 million barrels of oil supply per day in the coming months.

Citigroup stated that any disruption to Iranian crude oil exports may have a smaller impact on prices than expected. The bank noted that the volume of Iranian crude oil exports has been declining, and the purchasing amount by Chinese refineries is also decreasing.

Brent crude oil futures are currently trading at around $77 per barrel.