- Oil prices could reach US$200/bbl in worst-case scenario as more than 11 million b/d of Gulf crude and condensate supply remains curtailed.
- A prolonged closure of the Strait of Hormuz poses the single greatest threat to global energy markets in decades, according to Wood Mackenzie.
- More than 11 million barrels per day (b/d) of Gulf crude and condensate production is currently curtailed.
- The longer disruption persists, the greater the impact on energy prices, industrial activity, trade flows and global economic growth.
- The global economy could contract by as much as 0.4% in 2026, marking the third global recession this century, with significant economic scarring.
- Brent crude prices could approach US$200/bbl by end-2026, despite global oil demand falling by 6 million b/d year-on-year in H2 2026.
The closure of the Strait of Hormuz represents a potential disaster for global energy markets, with more than 11 million barrels per day (b/d) of Gulf crude and condensate currently curtailed.2
A recent report by Wood Mackenzie emphasizes that this disruption poses the single greatest threat to energy stability in decades.
Brent crude prices could reach up to US$200 per barrel by the end of 2026, starkly contrasting with a projected decline in global oil demand by 6 million b/d year-on-year in the latter half of that year.
The report warns that the longer the Strait remains closed, the more severe the repercussions on energy prices, with industrial activity and trade flows severely impacted.4
This could lead to a contraction of the global economy by around 0.4% in 2026, potentially marking the third recession this century.
The implications extend beyond pricing and demand—significant economic scarring is anticipated if the disruption persists.
Analysts caution that the intricate ties between oil production and overall economic health make this scenario a critical one to monitor, as the ripple effects of such a market shock are likely to be felt across multiple sectors worldwide.
“Closure of the Strait of Hormuz presents a severe threat to the global energy market, with over 11 million b/d of Gulf crude and condensate supply currently curtailed. As disruptions extend, oil prices could rise sharply, impacting global economic growth.”
