Analysts See $100 Oil on Strait of Hormuz Disruption

Following the escalation of conflict in the Middle East, energy analysts and major investment banks expect oil prices to surge toward $90 per barrel this week, with the possibility of hitting $100 if disruptions in the crucial Strait of Hormuz persist.

In early Asian trading on Monday, Brent crude prices spiked by around 10%, rising above $80 per barrel. Given the scale of the conflict and already disrupted tanker traffic through the Strait of Hormuz, analysts anticipate further volatility in the coming days.

Citigroup expects Brent crude to trade in the $80–$90 per barrel range in its base-case scenario over the next week. The bank noted that its outlook assumes either a change in Iranian leadership or sufficient de-escalation within one to two weeks, or a U.S. move toward de-escalation after achieving strategic objectives.

Goldman Sachs estimates that oil prices currently include an $18 per barrel real-time risk premium. However, the bank added that if only 50% of flows through the Strait of Hormuz are halted for one month, the war-related risk premium could moderate to around $4 per barrel.

Wood Mackenzie warned that disruptions to flows could push oil prices above $100 per barrel. The firm noted that a closure of the Strait of Hormuz threatens nearly 15% of global oil supply and 20% of global LNG supply. If tanker movements are not quickly restored, oil prices could exceed the $100 mark.

Alan Gelder, Senior Vice President of Refining, Chemicals, and Oil Markets at Wood Mackenzie, stated that in the current scenario, oil prices above $100 per barrel are possible if transit flows are not re-established promptly. He added that, even under an optimistic scenario in which Iran cooperates and exports resume, it could take several weeks for flows to normalize.

During that period, oil prices would remain heavily exposed to upside risks. As a recent comparison, analysts pointed to the early days of the Russia–Ukraine conflict, when fears of supply losses drove oil prices above $125 per barrel.

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