Analysts see oil at $100/bbl amid Hormuz disruption
Crude oil market analysts have warned that the ongoing disruption to oil flows through the Strait of Hormuz could send prices up to $100/bbl.
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Brent crude’s price has moved closer to $85/bbl after the US and Israeli forces struck Iran in a joint military confrontation last week.
Iran retaliated with regional strikes and an apparent closure of the Strait of Hormuz, prompting oil market analysts to factor in a substantial risk premium.
The Strait of Hormuz links the Persian Gulf to the Gulf of Oman. About 20% of global crude oil passes through the strait, making it a critical chokepoint for nearly 20 million b/d of international oil flows, according to a report by global investment bank Goldman Sachs.
“Oil prices can rise substantially more if the market demands a premium for the risk of more persistent supply disruptions,” Goldman Sachs’ head of oil research Daan Struyven wrote.
Citing estimates from the International Energy Agency, Goldman Sachs said only 4.2 million b/d of these flows could be rerouted through existing pipeline infrastructure, leaving roughly 16 million b/d potentially stranded, in the event of a full closure of the passage.
Goldman Sachs has raised average Brent's price forecast for the second quarter of 2026 by $10/bbl to $76/bbl, assuming a substantial reduction in crude flows through the strait, Reuters reported.
“Depending on the extent and duration of restrictions to transit through the Strait of Hormuz, Goldman Sachs Research estimates for the increase in oil prices range from $1-15 per barrel,” it said.
Energy analytics firm Wood Mackenzie (WoodMac) expects oil prices to hit over $100/bbl if Iran is successful in blocking the critical transit.
“Higher oil and gas prices are certain as the closure of the Strait of Hormuz threatens to disrupt 15% of global oil supply and 20% of global LNG supply,” WoodMac said in a note.
Analysts from Citigroup expect Brent crude’s price to trade in a range of $80-90/bbl over the coming weeks, if intense shelling around the region continue to dampen vessel movement, Bloomberg reported.
India and China are dominant buyers of Strait-transiting crude, according to cargo tracking platform Kpler. Any sustained closer could potentially “trigger supply shocks across multiple commodity classes simultaneously,” it said.
“The US-Iran conflict has put the Strait of Hormuz on a knife's edge,” Kpler said. “This is no longer a geopolitical risk premium in the abstract. Supply is being disrupted in real time,” it added.
Meanwhile, crude supply from other regional players – Iraq, Kuwait, etc. – could start halting within days if the strait remains closed, potentially slashing almost 3.3 million b/d of crude supply by the eighth day of the conflict, Reuters cited JP Morgan analysts.
Global financial services firm UBS expects Brent’s price to average $72/bbl in 2026 – about $10/bbl higher than its previous forecast, Reuters reported.
“When oil infrastructure begins to take hits inside what traders had quietly assumed was a secondary zone of the conflict, the market’s mental map changes instantly,” SPI Asset Management managing partner Stephen Innes said.
By Aparupa Mazumder
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