(by Oil & Gas 360) – Energy markets are increasingly driven by geopolitical risk rather than traditional supply-demand fundamentals, and major banks are adjusting their outlook accordingly.
Investment banks have started raising crude price forecasts as tensions around the Strait of Hormuz raise the possibility of supply disruptions from the world’s most important energy corridor. Analysts at Goldman Sachs They recently raised their second-quarter Brent forecast by $10 per barrel, reflecting the growing risk premium associated with Middle East instability.
Meanwhile UBS It also increased its Brent price outlook for early 2026 and the full year, citing tightening supply conditions and rising geopolitical uncertainty.
At the center of investors’ concerns is the Strait of Hormuz, a narrow shipping corridor that transports nearly a fifth of the world’s oil and the bulk of LNG exports. Analysts at JPMorgan Chase Warnings that blocking the strait would soon force major Gulf exporters such as Iraq and Kuwait to cut production within days if tankers are unable to load or leave.
Markets are starting to price in these risks. Brent crude oil has already climbed above the $90 per barrel threshold, but many analysts say the market could rise significantly if tensions escalate or shipping disruptions persist.
Some forecasts suggest that the price of carpets will approach $110 in an extended disruption scenario, while officials in the Gulf have warned that prices could rise significantly if exports are halted.
Production disruptions are already raising concerns. Kuwait has reportedly cut output slightly amid regional security concerns, while Qatar has warned that prolonged unrest could push oil prices above $150 a barrel within weeks.
The broader concern extends beyond the energy sector. According to the speech International Monetary FundContinued oil price shocks will test the resilience of the global economy, particularly as inflationary pressures remain sensitive to energy costs.
For capital markets, the situation indicates how quickly geopolitical events can change commodity price patterns. Energy equities, shipping companies, and LNG infrastructure operators are responding quickly to higher price expectations, while energy-intensive industries face higher cost pressures.
Whether the current rally will become a sustained energy shock depends largely on how events around Hormuz unfold.
For now, markets seem to be risking prices rather than a confirmed supply loss. But with world oil flows largely confined to one corridor, analysts say even the threat of disruption is enough to change capital market expectations.
