Oil shock fears mount as banks warn Brent crude could surge to $150–$200 – Firstpost

Global oil market fears intensified on Friday after major financial institutions warned that Brent crude prices could surge sharply if disruptions around the Strait of Hormuz continue, raising fresh concerns over inflation, supply shortages and global economic slowdown.

According to a Reuters report, Barclays maintained its 2026 Brent crude forecast at $100 per barrel but said risks are now “skewed higher” as tensions in the Middle East continue to disrupt energy flows. Brent crude was trading around $105 per barrel on Friday amid doubts over a breakthrough in US-Iran peace negotiations and continued closure of the Strait of Hormuz.

The bank noted that nearly 14 million barrels per day of oil supply — roughly 14 per cent of global supply — has been removed from the market due to disruptions affecting major Gulf producers including Saudi Arabia, Iraq, Kuwait and the UAE. Barclays also warned that global inventories remain critically tight, with US crude stockpiles nearing their lowest levels since 2020.

Meanwhile, a report by Citi projected Brent crude could climb to $120 per barrel in the near term and potentially touch $150 per barrel under a bullish scenario. Citi said markets are underestimating the duration of supply disruptions and geopolitical tail risks emerging from the ongoing conflict around the Strait of Hormuz.

Adding to the alarm, energy consultancy Wood Mackenzie warned that crude prices could spike to as high as $200 per barrel in a worst-case scenario if the strategic waterway remains largely closed through the end of 2026. The firm said more than 11 million barrels per day of Gulf crude production and over 80 million tonnes per annum of LNG supply are currently impacted.

Analysts believe sustained high oil prices could intensify global inflation pressures, force central banks to delay interest rate cuts and hurt energy-importing economies such as India, Japan and parts of Europe. The crisis is also expected to accelerate the push towards alternative energy and electrification as countries seek to reduce dependence on volatile hydrocarbon markets.