Middle East Tensions Fuel Oil Price Surge Forecast
Oil prices are expected to rise further in 2026 due to ongoing shipping disruptions in the Middle East, particularly in the Strait of Hormuz and Red Sea chokepoints. The Reuters poll of 31 economists and analysts forecasts Brent crude will average $85.22 a barrel next year, up from June's estimate of $84.50.
The U.S.-Iran conflict, which began in late February, has significantly reduced traffic through the Strait of Hormuz, previously carrying about a fifth of global crude oil and natural gas supplies. This disruption is expected to persist throughout the second half of the year.
Additionally, Houthi attacks on shipping vessels in the Red Sea have caused further disruptions, prompting diversions and increased supply risks. Analysts predict that it will take four to six months for oil flows from the Gulf to normalize after a durable ceasefire between the United States and Iran is reached.