How the Strait of Hormuz Crisis Could Reshape Global Oil Supply and Prices Through 2026

During the conflict, flows dropped dramatically to around 3.8 million barrels per day, triggering what the International Energy Agency described as the largest oil supply disruption in history.

Several major Gulf producers have had to shut in production as export routes stalled. According to energy outlook estimates cited by analysts and the U.S. Energy Information Administration, producers including Saudi Arabia, Iraq, Kuwait, the United Arab Emirates, Qatar, and Bahrain collectively shut in about 10.5 million barrels per day of production in April, with outages expected to peak near 10.8 million barrels per day in May.

That scale of lost output represents a massive shock to a global oil system that typically consumes about 100 million barrels per day.

Why Analysts Expect the Shortage to Peak in Q2 2026

While supply losses surged quickly after the conflict escalated, the shortage itself may take months to fully work through the system.

Morningstar DBRS expects the global crude deficit to peak in the second quarter of 2026, assuming the conflict de‑escalates and maritime traffic begins recovering by early summer.

Several factors explain this delayed peak:

• Inventory drawdowns: With exports constrained, global oil stockpiles have been steadily depleted.
• Slow production restarts: Gulf producers cannot instantly restore output once shipping lanes reopen.
• Logistical bottlenecks: Shipping schedules, insurance markets, and port operations often take months to normalize after geopolitical disruptions.

Because of these factors, energy agencies say it could take until late 2026 or even early 2027 for global oil production and trade flows to return to pre‑conflict patterns.

Brent Oil Forecasts Are Being Revised Upward

Financial institutions have responded to the supply shock by revising their oil price outlooks for 2026.

Morningstar DBRS raised its full‑year 2026 Brent crude forecast to about $80 per barrel as a base‑case scenario reflecting ongoing shortages.

Other banks see even tighter conditions:

• Goldman Sachs: around $90 per barrel for Q4 2026 in its revised outlook.
• Barclays: about $100 per barrel for the 2026 annual average in a prolonged disruption scenario.
• Morgan Stanley: targets near $110 per barrel in Q2 2026 before moderating later in the year.

Analysts also warn that prices could spike far higher if the Strait remains heavily disrupted for longer. In extreme scenarios, some estimates suggest Brent could temporarily reach $130–$150 per barrel if exports remain constrained into mid‑summer.

The Geopolitical Risk Premium in Oil Prices

Even when physical supply begins recovering, oil prices may remain elevated because of a persistent geopolitical risk premium.

The U.S. Energy Information Administration notes that uncertainty about supply disruptions—especially around the Strait of Hormuz—has added a substantial risk component to oil prices as traders price in the possibility of renewed outages.

Energy executives also expect the market to take time to rebalance. Saudi Aramco’s CEO has warned that prolonged disruptions could delay full market normalization until 2027, depending on how quickly exports and production recover.

Demand Destruction and Possible Fuel Rationing

Paradoxically, one of the main forces that eventually stabilizes oil markets during supply shocks is falling demand.

High fuel prices typically lead to reduced consumption as businesses and households cut back. Recent analyses already suggest that elevated prices and limited supply are beginning to trigger demand destruction, with refiners and industrial users reducing consumption in response to higher costs.

Some governments are also exploring emergency measures to limit fuel demand, such as conservation campaigns or transport policies, as shortages ripple through energy markets.

What It Means for Gasoline Prices

For consumers, the immediate effect of the supply shock is straightforward: higher fuel prices.

With crude costs rising and product supply constrained, refiners pass higher input costs through to gasoline and diesel markets. Analysts say consumers are already facing a sharp increase in pump prices in many regions ahead of the Northern Hemisphere’s peak summer driving season.

Over time, those higher prices may help rebalance the market by reducing consumption, but that process can take months.

The Key Variable: How Long the Strait Disruption Lasts

The outlook for oil markets through 2026 ultimately depends on one question: how quickly shipping through the Strait of Hormuz fully normalizes.

If exports recover quickly, inventory rebuilding and production restarts could gradually ease the supply deficit. But if disruptions persist—or if infrastructure damage slows production recovery—tight conditions and elevated oil prices could last well into 2027.

For now, most analysts agree on one point: the combination of Gulf production outages, shipping disruptions, and geopolitical risk has fundamentally tightened the global oil market, making 2026 one of the most uncertain years for energy prices in decades.