More than 11 million barrels per day of Gulf crude and condensate production is currently curtailed, and over 80 million tonnes per annum of LNG supply, about 20% of global supply, remains inaccessible. A prolonged closure of the Strait of Hormuz is described as the single greatest threat to global energy markets in decades. Three scenarios are presented: Quick Peace, Summer Settlement, and Extended Disruption, each with different timelines for ending conflict and reopening the Strait. Impacts are assessed across oil and gas supply, prices, energy demand, and the broader global economy. Under Quick Peace, the Strait reopens by June and global conditions return toward pre-war trajectories by Q4 2026, with Brent easing to around US$80/bbl by end-2026 and US$65/bbl in 2027.
"“The Strait of Hormuz is the most critical chokepoint in global energy markets, and a prolonged closure would become far more than an energy crisis,” said Peter Martin, head of economics at Wood Mackenzie. “The longer disruption persists, the greater the impact on energy prices, industrial activity, trade flows and global economic growth.”"
"Under the most optimistic 'Quick Peace' scenario, a workable peace agreement is reached in the near term, and the Strait reopens by June. The global economy broadly returns to its pre-war trajectory by Q4 2026. Crude prices fall sharply following a deal, with Dated Brent easing to around US$80/bbl by end-2026 and declining further to US$65/bbl in 2027 as the oil market returns to oversupply."
"The 'Summer Settlement' scenario assumes the ceasefire holds but negotiations extend into late summer, with the Strait remaining largely closed until September. Oil and LNG supply shortages persist through Q3 2026, driving a shallow global recessi"
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