Barclays said on Thursday that a prolonged closure of the Strait of Hormuz would likely lead to a 13-14 million barrels per day supply loss, noting that while the scale of the disruption is immense, so is the uncertainty around its duration.
Exports from Yanbu and Fujairah have picked up in recent weeks and assuming no threat to shipments from these ports, the bank sees a supply disruption of that magnitude as likely in the event of a prolonged closure of the Strait.
The International Energy Agency estimates world oil demand this year will be about 104-105 million bpd.
Barclays added that the Iran war has triggered the largest geopolitical shock to energy markets since the 1990 Gulf War, driven by extremely tight spot fundamentals rather than speculative excess.
U.S. President Donald Trump has said Iran is desperate to make a deal to end nearly four weeks of fighting, contradicting the Iranian foreign minister who said his country was reviewing a U.S. proposal but had no intention of holding talks to wind down the conflict.
“Notwithstanding uncertainty about the ceasefire negotiations, in our base case, we expect traffic through the Strait to normalize by early April, which would be consistent with Brent averaging $85/b in 2026,” Barclays said in a note.
However, if disruptions persist until end-April, 2026 Brent forwards could reprice to $100 per barrel, and in a more prolonged scenario stretching to end-May prices could rise to $110.
Iran has blocked the Strait of Hormuz, trapping roughly a fifth of the world’s oil and liquefied natural gas supplies, boosting crude oil above $100 a barrel – and delivering sticker shock at the pumps.
Oil prices climbed over 2% on Thursday, with Brent futures trading at $104.36 a barrel by 0647 GMT, while U.S. West Texas Intermediate crude futures were at $92.23 a barrel.
Barclays also said that supply elasticity is structurally weaker than in past shocks, with OPEC+ spare capacity under-delivering and non-OPEC+ growth, led by the U.S., steadily decelerating due to years of under-investment.
(Reporting by Swati Verma in Bengaluru. Editing by Mark Potter)