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.
US 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 US 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.