$166 a barrel? Middle East oil gives clue to where all prices could be headed if Iran war drags on

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The extreme spike in oil prices seen in local markets in the Middle East could give investors a glimpse into to where U.S. and Europe prices are headed if the Strait of Hormuz isn’t opened soon.

Dubai crude oil prices surpassed $166 a barrel to a new record high on Thursday, according to market data provider Platts. Dated Brent and West Texas intermediate Cushing’s are trading around the $100 mark after historic runs higher.

The local markets for oil are often overlooked, but are now seen as a possible precursor of what could be ahead if the conflict doesn’t end soon.

Dubai and Oman current prices reflect the steep severity of the shortage in the Gulf, according to Natasha Kaneva, JPMorgan’s head of commodities research. But that doesn’t mean the American market will be spared another sharp jump, she said.