Crude Oil May Surge Up To $200 Per Barrel, Warns Wood Mackenzie Report

A prolonged closure of the Strait of Hormuz could push global crude oil prices up to $200 per barrel in the worst-case scenario, according to a report by Wood Mackenzie.

Global energy markets have remained tense since the Iran war began in February. Oil prices have risen sharply, increasing concerns around inflation, higher interest rates, and economic pressure across the world.

The report outlined three possible scenarios based on how long the Strait of Hormuz remains disrupted and how that affects global oil and gas supplies, energy prices, demand, and the world economy.

The report said uncertainty around the Strait has put global supply chains at risk. More than 11 million barrels per day of Gulf crude oil and condensate production is currently affected.

In addition, over 80 million tonnes per annum of LNG supply, equal to around 20 percent of global supply, has also been impacted.

“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,” said Peter Martin, head of economics at Wood Mackenzie.

Under the most optimistic scenario, called “Quick Peace”, the two sides resolve the conflict by June.

In this case, Brent crude prices could ease to around $80 per barrel by the end of 2026 and further decline to $65 per barrel in 2027.

The second scenario, called “Summer Settlement”, assumes that negotiations continue until late summer while the Strait remains mostly closed.

Oil and LNG shortages would continue through the third quarter of 2026, increasing the risk of a mild global recession in the second half of the year.

The worst-case scenario assumes the Strait remains largely closed until the end of 2026.

In that case, oil prices could rise to $200 per barrel even though global oil demand may fall by 6 million barrels per day in the second half of 2026.

The report said the global economy could shrink by as much as 0.4 percent in 2026 under this scenario.