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Oil Prices Surge: Strait of Hormuz Blockade Sparks $100 Brent Crude Forecast
2 May
Summary
- Barclays raises 2026 Brent crude forecast to $100/barrel due to Hormuz Strait issues.
- Global oil market deficit estimated at 6.6 million barrels per day, likely widening.
- Disruptions at Hormuz Strait could drive prices to $110 per barrel if prolonged.
Barclays has projected that Brent crude oil could reach $100 per barrel by 2026, a significant increase from their previous $85 forecast. This adjustment is primarily attributed to the impasse in the Strait of Hormuz, which has severely restricted oil flow.
Despite a fragile ceasefire, heightened rhetoric and limited transit through the strait persist. Barclays estimates the global oil market is currently experiencing a deficit of approximately 6.6 million barrels per day. This deficit is anticipated to widen as the supply shock continues.
The bank cautioned that the duration of the disruption directly correlates with the severity of the price shock. If the situation in the Strait of Hormuz continues, prices could reprice towards $110 per barrel, emphasizing this is not a new equilibrium.
Additionally, the potential exit of the United Arab Emirates from OPEC may not fully bridge the supply-demand gap and would reduce spare capacity.
