The U.S.-Iran war has made the Strait of Hormuz the world’s most dangerous chokepoint, causing major swings in crude markets. About a fifth to a quarter of global seaborne oil and much of the world’s LNG usually pass through this narrow route. Since late February, the shutdown has removed oil from the market, sent Brent prices above $100, and forced policymakers to take emergency action.
On March 11, the International Energy Agency (IEA) announced its largest-ever emergency stock release—400 million barrels—to help ease the shock. The U.S. will provide 172 million barrels from the Strategic Petroleum Reserve (SPR) over about 120 days. Despite this, prices are still high and volatile. In the near term, oil prices will depend on geopolitics, shipping risks, and how soon physical flows return to normal. [1]
Below, we lay out three research-backed (and possible) scenarios for oil prices for the rest of 2026 and the impact on various industries.
Strap on and be prepared, always! Because, folks, we are hitting the third wave of business-as-UNUSUAL in less than a decade.
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Editor’s note: This article is the first of a four-part series in which we do not attempt to make geo- or even political comments about current events but rather focus on how they impact global businesses financially. To not miss out on real-life solutions and tactical tips on mitigating obnoxious decisions, subscribe to our newsletter today!
What this series will cover:
- Possible scenarios for oil prices
- Industries that are impacted other than airlines
- Ensuring financial resilience without cutting unnecessary costs
- Master “what-if” scenarios and real-time visibility with Cloud EPM
Scenario 1: Oil stays roughly where it is (hovering around the high $90s to ~$110)
What would keep prices “higher for longer” without another major spike?
- A partial and fragile reopening of Hormuz, but no full ceasefire. This situation would keep insurance costs high and shipping below normal levels, limiting spot availability but stopping prices from rising further. [2]
- Emergency stock releases offset part of the shortfall. The IEA and SPR barrels backstop refiners for several months, buying time for shipping and insurance to return to normal. [3]
- OPEC+ is cautious but still plans to keep the global economy robust by gradually adjusting production schedules to add more oil supply, which has been disrupted by the war. However, the group might reverse the plan if the situation worsens or becomes too unpredictable. [4]
Evidence pointing this way now
- Spot Brent is above $100 with a wide intraday swing. This matches a market balancing war-driven tightness against policy support. [5]
- Futures are in backwardation, with later contracts trading at lower prices than current contracts. This suggests the market expects some easing by late 2026, even though near-term supply is still tight.
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Implications if this holds
- Energy producers (especially U.S. onshore names far from the conflict) continue to print strong free cash flow. Several investor notes point to midstream winners if oil stabilises at high levels. [5]
- Refining margins are mixed. Crude is expensive, but product cracks, especially for diesel and jet fuel, stay high due to Gulf outages. This helps some complex refiners but puts pressure on airlines and logistics.
- Inflation runs hotter than policymakers like, but not 2022hot; central banks stay cautious on rate cuts [6]. IEA flags softer demand growth and macro risk under higher prices. [7]
What to watch to validate this scenario
- A steady, if small, flow of escorted or negotiated transits through Hormuz, along with lower war-risk rates, and no major new attacks.
- Evidence that IEA/SPR barrels are landing: refinery run data and product balances are improving in Europe and Asia.
- OPEC+ keeps output steady or makes small adjustments, while leaving the door open to reverse course if needed.
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Scenario 2: Oil continues to rise (Brent spikes toward $120–$150, with tail risk to $200)
What could drive prices even higher from this point?
- A prolonged or total closure of Hormuz, with a possible toll, could force insurers, shipowners, and crews to either avoid the strait or stay put. The IEA calls this the biggest supply disruption in oil history. Eventually, emergency stocks would not be enough to cover a long outage.
- Attacks on critical infrastructure such as pipelines, export terminals, or refineries in the Gulf, or on alternate routes such as the Red Sea, could remove the last remaining bypass options. [8]
- Policy tools become less effective. Insurance premiums remain high, naval escorts do not guarantee safe passage, and the market sees further stock releases as not enough.
Why is this scenario highly plausible?
In March, Brent saw record monthly gains and closed above $100 several times, even after emergency stock releases. Major banks now expect triple-digit averages in the near term and see more upside if disruptions continue. [9]
Spot jet fuel prices and crack spreads have surged, indicating severe refining tightness, a common phenomenon during major crude logistics disruptions. [10]
According to the New York Post, the Iranian parliament’s National Security and Foreign Policy Committee has approved a bill on imposing transit fees on all ships travelling through the Persian Gulf. Though the bill is still pending final approval, the charge can be as high as $2 million per vessel, except for vessels from countries that sanction Iran (i.e., a ban). Yep, that means no chance for the United States and Israel. [11]
Where could it go?
Investor commentary on this conflict has suggested $150 oil in tight markets, and some experts warn of $200 in worst-case scenarios, such as a long Hormuz closure, infrastructure damage, and failed shipping insurance. While these levels are not the base case, they are now possible. [12]
Implications if prices keep climbing
A new inflation shock and slower growth could follow. Historically, oil price spikes have often preceded recessions. In March, the price surge matched a sharp drop in U.S. 10-year yields as markets shifted from worrying about inflation to worrying about growth.
Aviation and tourism were hit hard, especially in the Asia-Pacific region, which struggles to keep up with surging fuel costs [13]. Flight cuts, dissolve discounts, higher fares, cancellations or reroutes are merely “band-aid solutions”; we’re already seeing cancellations and export bans in Vietnam [14] and New Zealand [15].
Government budgets are under pressure as countries try to keep diesel and gasoline prices down; for instance, Southeast Asian governments have immediately poured in emergency funds to subsidise the sector, but prices are rising again. [16]
Preparing for the worst requires careful thinking. Don’t make these distinguishable mistakes:
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What to watch to confirm a further upswing
- Watch for the frequency of attacks and confirmed damage to Gulf energy assets, as well as periods of several weeks with no transits through Hormuz.
- Look for insurance quotes staying at 5–10% of hull value, or signs that proposed public reinsurance is not bringing traffic back.
- Watch for Brent to close repeatedly near previous highs, around $119, or to break out to new highs on news of an escalation.
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Scenario 3: Oil starts to fall (drifting back into the $80s—or lower if peace surprise)
What could cause prices to drop?
- De-escalation and strong maritime security could help. A lasting ceasefire or an effective international convoy system would lower physical risks and insurance costs, letting tankers move again. Even a partial return to normal could quickly add barrels to the market that have been stuck for weeks. [17]
- Demand destruction and substitution. Elevated pump prices and airfare hikes cool consumption, while some importers pivot to alternative grades or suppliers. (IEA has already trimmed 2026 demand growth on the back of higher prices and travel disruption.)
- Supply increases outside the Gulf could help. U.S. production usually rises with a delay when prices are high. The EIA expects Brent to fall below $80 by the third quarter as supply recovers and non-OPEC output grows, though this depends on geopolitics. [18]
Implications if prices fall back
- Refiners and chemical companies benefit the most as feedstock costs drop. Airlines can slowly rebuild their schedules as jet fuel margins narrow.
- Energy stocks split: integrated majors and midstream companies with steady cash flows can handle lower prices, but high-risk upstream firms are more affected.
- On a broader level, headline inflation cools, giving central banks more room to lower rates. This is generally good news for risk assets.
What to watch to validate this scenario
- Look for confirmed convoy escorts, lower war-risk insurance quotes, and more daily transits through Hormuz.
- Watch for inventory builds in the OECD and China, and for product cracks to narrow. These are signs that emergency barrels and resumed flows are reaching the market.
- OPEC+ may reverse cuts more quickly and show it is comfortable with Brent prices below $90 to protect long-term demand.
This is the first part of our series, where we dive into world events to explore and analyse their impacts on the operational and financial aspects of businesses, and to propose possible resolutions to minimise their negative effects.
In the next article, we will discuss industries that are secondary-impacted yet whose operations remain significant. Take part in these thought-provoking conversations with TRG by subscribing to our newsletters today!
References
- https://www.iea.org/news/iea-member-countries-to-carry-out-largest-ever-oil-stock-release-amid-market-disruptions-from-middle-east-conflict
- https://www.cbsnews.com/video/it-is-quite-likely-us-will-use-military-means-reopen-strait-of-hormuz-analyst-says/
- https://www.iea.org/news/new-iea-report-highlights-options-to-ease-oil-price-pressures-on-consumers-in-response-to-middle-east-supply-disruptions
- https://www.ainvest.com/news/opec-readies-april-supply-hike-middle-east-crisis-threatens-overwhelm-market-balance-2603/
- https://finance.yahoo.com/sectors/energy/articles/3-pipeline-stocks-quietly-printing-125100377.html
- https://www.reuters.com/markets/europe/unlike-2022-central-banks-diverge-if-energy-shock-deepens-2026-03-31/
- https://www.reuters.com/business/energy/world-faces-largest-ever-oil-supply-disruption-middle-east-war-iea-says-2026-03-12/
- https://www3.nhk.or.jp/nhkworld/en/news/20260318_19/
- https://edition.cnn.com/2026/03/20/energy/oil-gas-prices-intl-hnk
- https://www.asiamediacentre.org.nz/energy-crisis-strikes-south-east-asias-fragile-travel-recovery
- https://nypost.com/2026/03/31/world-news/iran-to-charge-ships-passing-strait-of-hormuz-raising-risks-of-global-recession/
- https://economictimes.indiatimes.com/industry/energy/oil-gas/crude-oil-price-forecast-200-amid-us-israel-iran-war-inflation-economy-impact-macquarie-forget-150-theres-new-grave-warning-to-the-world/articleshow/129839644.cms?from=mdr
- https://www.oxfordeconomics.com/resource/the-iran-wars-ripple-effects-on-global-travel-transit/
- https://news.tuoitre.vn/vietnamese-airlines-struggle-to-minimize-losses-amid-higher-jet-fuel-prices-103260330151236374.htm
- https://www.reuters.com/business/energy/air-new-zealand-cut-flights-fuel-price-surge-wreaks-havoc-travel-2026-03-12/
- https://www.youtube.com/watch?v=grGcBaLSoQE
- https://www.cbsnews.com/news/strait-of-hormuz-iran-war-oil-gas-prices-persian-gulf/
- https://www.eia.gov/pressroom/releases/press584.php
