Oil prices may have run from $64 to $75 in recent weeks.

But that’s nothing compared to what some experts say may be coming, as major oil companies continue to underinvest in the exploration of new oil reserves.

In fact, analysts at Sanford C. Bernstein & Co. just noted:

“Investors who had egged on management teams to reign in capex and return cash will lament the underinvestment in the industry.  Any shortfall in supply will result in a super-spike in prices, potentially much larger than the $150 a barrel spike witnessed in 2008.”

Ever since oil prices plummeted from their lofty $150+ oil highs, we’ve seen a sharp drop in capex from oil producing companies.  In some cases, capex was cut by as much as 50%.  That means exploration and the discovery of new oil resources has diminished.

It’s no walk in the park to find new oil.

While some are quick to call the threat of $150+ oil hogwash, we wouldn’t.

One of the very catalysts that could add fuel to oil’s rally are U.S. sanctions against Iran, for example, which could remove 2.5 million barrels per day.

“It does not occur to the U.S. president that it is Trump himself who is driving prices up through his Iran policy,” Commerzbank analysts said, as quoted by OilPrice.com.  If the US succeeds in blocking Iran from exporting its oil, OPEC would struggle to offset the missing barrels.

Making things a bit worse, Iran is threatening to block the Strait of Hormuz, a major passageway for oil.  “Around 17 million barrels per day or 35 percent of all seaborne oil exports pass through the strategic waterway and, needless to say, such a move would propel oil prices well into triple figures,” Stephen Brennock, analyst at PVM Oil Associates said, as quoted by CNBC.

“In case there is ‘a military accident’ in the Arabian Gulf, the oil supply route could be seriously disrupted,” says Athens based shipping expert Theo Matsopoulos, as quoted by Forbes. “When the markets are in critical point, they are more sensitive; and they translate facts more violently than they would during times of stability. It is not necessary for the Strait of Hormuz to be fully blocked, as happened in the Suez Canal in 1956. The expectation of a blockade and the potential for disruption could cause turbulence and shape a bullish market for crude oil.”

With even the slightest threat of a war over the Strait, one of the best investment opportunities could be American fracking companies, which would have to pump oil as quickly as possible to make up for supply shortfall.  Stay tuned to The Cheap Investor for more.