Global crude oil prices could surge to as high as $200 per barrel in a worst-case scenario if the Strait of Hormuz remains closed through the end of 2026, according to a report.
As per a report by Wood Mackenzie, a prolonged disruption in the strategic waterway could trigger a severe global energy and economic crisis.
The report comes amid continued tensions linked to the Iran war, which began in February and has disrupted global energy supply chains. Oil prices have already risen sharply, fuelling concerns over inflation, higher interest rates and slower global growth.
Wood Mackenzie outlined three possible scenarios depending on how long the Strait remains disrupted and how negotiations between the warring sides progress.
Strait seen as critical global chokepoint
“The Strait of Hormuz is the most critical chokepoint in global energy markets, and a prolonged closure would become far more than an energy crisis,” Peter Martin, head of economics at Wood Mackenzie, said, as quoted by news agency ANI.
“The longer disruption persists, the greater the impact on energy prices, industrial activity, trade flows and global economic growth,” he added.
The report noted that more than 11 million barrels per day of Gulf crude and condensate production is currently curtailed. It also said over 80 million tonnes per annum of LNG supply, around 20 per cent of global supply, has been affected.
The closure has already removed nearly 14 million barrels per day of oil from the market, including exports from Saudi Arabia, Iraq, the UAE and Kuwait.
Three possible scenarios outlined
Under the most optimistic “Quick Peace” scenario, the conflict is resolved by June, allowing Brent crude to ease to around $80 per barrel by the end of 2026 and further to $65 in 2027.
The “Summer Settlement” scenario assumes negotiations continue through late summer, with the Strait remaining largely closed during that period. Oil and LNG shortages would continue through the third quarter of 2026, raising risks of a shallow global recession.
The worst-case “Extended Disruption” scenario assumes the Strait remains largely shut until the end of 2026, with tensions escalating further.
Under this situation, oil prices could spike to $200 per barrel even as global demand drops by six million barrels per day in the second half of 2026.
The report warned that the global economy could contract by as much as 0.4 per cent in 2026 under this scenario.
Iran had earlier warned of $200 oil
The latest Wood Mackenzie warning comes months after Iran itself cautioned that crude prices could touch $200 per barrel if the conflict escalated further.
In March, Iran’s military command warned the world to “get ready for oil at $200 a barrel” as fighting intensified and merchant ships came under attack in Gulf waters.
Iranian military spokesperson Ebrahim Zolfaqari had said regional instability caused by the conflict could sharply drive up oil prices.
At the time, the Strait of Hormuz had already emerged as one of the biggest flashpoints in the conflict, with fears growing over disruptions to global oil flows.
Markets remain nervous amid uncertain talks
Oil prices climbed on Friday as investors remained doubtful about progress in US-Iran peace negotiations, particularly over disagreements related to Iran’s uranium stockpile and controls on the Strait of Hormuz.
Brent crude futures rose 2.3 per cent to $104.96 a barrel, while US West Texas Intermediate futures gained 1.8 per cent to $98.08, according to Reuters.
“WTI is likely to remain in a $90–$110 range next week,” commodity analyst Satoru Yoshida of Rakuten Securities told Reuters.
The report also highlighted that Asian and European nations may increasingly shift towards electrification and alternative energy if disruptions continue. It added that US LNG exporters could benefit from growing global demand for diversified energy supplies.
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