A Supply Shock With Global Consequences
Oil prices could surge to $150 per barrel or higher if the ongoing conflict involving the United States, Israel, and Iran continues to disrupt energy flows from the Gulf, according to analysis from Wood Mackenzie.
The report warns that prolonged fighting and a potential closure of the Strait of Hormuz could push crude prices toward $200 per barrel.
Gulf Exports Vanish From Global Markets
The Gulf region produces roughly 20 million barrels of oil each day. According to Wood Mackenzie, about 15 million barrels per day of exports have effectively been removed from the global market because of the conflict.
Such a disruption represents a major supply shock for the global energy system.
Simon Flowers, chairman and chief analyst at the consultancy, said restarting production will not happen quickly even after the conflict ends.
Oil stored at refineries or ports could move to tankers quickly. However, wells shut for extended periods may require weeks to restart and reach full output.
Europe and Asia Face Rising Pressure
Europe depends heavily on Gulf refineries for refined fuels.
In 2025, the region received 60 percent of its jet fuel and 30 percent of its diesel from Gulf suppliers. With those shipments disrupted, European markets face growing pressure.
Asia is experiencing similar stress.
China, India, and other major buyers are competing for alternative supplies from West Africa and Latin America. This competition has already pushed prices higher across global crude markets.
Strategic Reserves Provide Limited Buffer
Countries may release oil from strategic reserves to offset the supply shock.
Members of the International Energy Agency hold reserves equivalent to about 90 days of imports. However, large-scale releases have rarely occurred and may not fully offset the lost Gulf supply.
Alternative production sources also remain limited.
Even if U.S. producers increase output in response to higher prices, analysts expect additional supply to reach only a few hundred thousand barrels per day within several months.
Demand May Have to Fall
With supply constrained, analysts say the market may rebalance only if global demand declines.
Wood Mackenzie estimates global oil consumption at around 105 million barrels per day. To restore equilibrium under current conditions, prices may need to rise significantly.
Brent crude could reach $150 per barrel in the coming weeks if disruptions continue.
A Risk of Even Higher Prices
Oil prices approached $150 during the Russia-Ukraine crisis in 2022 after adjusting for inflation.
The current conflict could create an even larger shock because of the scale of Gulf exports at risk.
Wood Mackenzie analysts therefore say oil reaching $200 per barrel in 2026 remains a plausible scenario if the conflict persists and key shipping routes remain blocked.
The market’s direction will largely depend on how long the conflict lasts and whether shipping can continue through the Strait of Hormuz.
Source: KT
