Middle East Conflict: Rising Oil Prices & Potential €3.50 Bread Cost
The Arabie saoudite is considering the potential for a $180 per barrel oil price, a significant increase from the current $110, according to confidential projections, as escalating tensions in the Middle East disrupt energy markets and raise the specter of broader conflict. This assessment, while causing concern within the Kingdom, also reflects a growing expectation of potential revenue gains should geopolitical instability persist.
The assessment comes as Saudi Arabia asserts its right to military retaliation against Iran following repeated attacks, including recent missile and drone strikes targeting the Kingdom. “We reserve the right to take military action if necessary,” stated Prince Faisal bin Farhan, the Saudi Foreign Minister, after a meeting in Riyadh with diplomats from several Arab and Muslim nations. He accused Iran of attempting to pressure its neighbors through these attacks, adding, “The Kingdom will not yield to pressure, on the contrary, it will turn against those who exert it.”
These statements followed announcements on Wednesday of new Iranian attacks on Saudi Arabia, with multiple explosions reported in the capital. The Saudi Ministry of Defense confirmed intercepting ballistic missiles. Prince Faisal bin Farhan characterized the timing of the attacks – coinciding with a diplomatic gathering in Riyadh – as a clear indication of Iran’s disregard for diplomatic solutions. “Targeting Riyadh while a number of diplomats are meeting… I think that is the clearest sign of what Iran thinks of diplomacy,” he said.
The conflict is already impacting critical energy infrastructure across the region. The world’s largest natural gas liquefaction facility, located in Qatar, has sustained “considerable” damage from Iranian strikes. Attacks have also targeted Iranian energy assets, including the South Pars gas field, prompting threats from former U.S. President Donald Trump regarding further escalation.
Amidst the escalating crisis, Saudi Arabia is reportedly leveraging its defense agreement with Pakistan, which includes all forms of military assistance. According to Saudi political analyst Salman Al-Ansari, this agreement provides Saudi Arabia with a significant deterrent, effectively a “nuclear umbrella” provided by Pakistan, should it fully engage in a wider conflict with Iran. The defense pact, signed in September 2025, was explicitly confirmed by Pakistani Defense Minister Khawaja Asif to encompass all military means.
The situation is further complicated by the targeting of energy facilities in multiple countries, raising fears of a long-term global energy crisis. While the immediate impact on oil prices is significant, the potential for sustained disruption to gas supplies, particularly from Qatar, presents a more complex challenge. The Saudi assessment of a potential $180 barrel price, while privately held, underscores the Kingdom’s anticipation of a prolonged period of instability and its potential to capitalize on the resulting market conditions.
As of today, no official statement has been released regarding specific retaliatory measures Saudi Arabia might take, and diplomatic efforts to de-escalate the situation remain ongoing. A meeting between Pakistani Prime Minister Shehbaz Sharif and Saudi Crown Prince Mohammed bin Salman took place in Riyadh on March 12, 2026, but details of the discussion have not been publicly disclosed.