Oil Prices Soar as Middle East Tensions Escalate Through Hormuz

Oil prices are expected to remain elevated in the near term as tensions escalate in the Middle East. The Strait of Hormuz, which is a crucial waterway for oil exports, has been threatened by Iran's warning that any vessel attempting to transit could come under attack.

Israeli and U.S. strikes on Iranian targets have led to attacks across the Gulf, raising concerns about supply disruptions. Goldman Sachs raised its Q2 2026 average price forecast for Brent crude oil to $76 per barrel, while UBS expects Brent will average $71 per barrel in the first quarter.

J.P. Morgan estimates that crude oil supply from Iraq and Kuwait could be shut down within days if the Strait of Hormuz remains closed, projecting supply losses of up to 4.7 million barrels per day. ANZ also raised its average Brent crude forecast to $90 a barrel for the first quarter of 2026.

The price of oil rose about 1% on Wednesday as the U.S.-Israeli strikes on Iran disrupted Middle East supplies, but gains slowed after President Donald Trump suggested the U.S. Navy could escort vessels through the Strait of Hormuz.