A prolonged closure scenario could push Brent crude to $200 per barrel by the end of 2026, while more than 11 million barrels per day of oil and condensates risk being blocked.
Hormuz Strait closure scenarios reshape global energy risks
The possible closure of the Strait of Hormuz continues to represent one of the most serious threats to global energy markets. Following comments by Donald Trump, who over the weekend suggested that a “largely negotiated” agreement with Iran was close, both Washington and Tehran later downplayed the likelihood of a rapid end to the conflict.
According to an analysis published by Wood Mackenzie, a prolonged disruption to maritime traffic through the Strait could drive oil prices sharply higher. The European Commission also warned in its Spring 2026 Economic Forecast that a longer Middle East conflict and a persistent energy crisis could weaken European growth and fuel another inflationary surge.
Worst-case scenario: prolonged Hormuz Strait closure and global energy shock
The most severe scenario assumes a prolonged closure of the Strait combined with regional military escalation and major disruptions to Gulf energy exports. Under this assumption, the channel would remain largely closed until the end of 2026, with the risk of renewed supply interruptions even after temporary ceasefires.
Wood Mackenzie estimates that:
- Brent crude prices could rise to $200 per barrel by the end of 2026, despite weaker global demand;
- more than 11 million barrels per day of oil and condensates could remain stranded;
- diesel and jet fuel prices could approach $300 per barrel at major refining hubs;
- the global economy could contract by up to 0.4% in 2026, triggering the third global recession of this century;
- oil and gas importing countries could accelerate electrification and energy independence strategies to reduce reliance on hydrocarbons.
The regional economic impact would be severe and uneven. The Middle East could experience a GDP contraction of 10.7% in 2026. EU GDP could decline by 1.5% in 2026 and a further 0.5% in 2027. US economic growth would fall below 1%, while China’s economy could slow to 3% in 2026.
“Long-term prospects point to structurally weaker oil prices compared with our pre-conflict base case if importing countries accelerate efforts to reduce dependence on oil,” said Alan Gelder, senior vice president for refining, chemicals and oil markets at Wood Mackenzie.
“If electrification advances more rapidly and oil imports are replaced, this would place additional downward pressure on prices, with Brent potentially trading $10 per barrel below the rapid peace scenario in the medium to long term.”
Hormuz Strait closure and the rapid peace scenario
In the most optimistic scenario, an acceptable peace agreement would be reached quickly and the Strait would reopen by June. Even under these conditions, the global economy would not fully return to pre-war conditions before the fourth quarter of 2026.
Oil prices would decline sharply following a diplomatic agreement, with Brent expected to stabilise around $80 per barrel by the end of 2026 and potentially fall to $65 in 2027. The oil market would then return to oversupply conditions.
Global GDP growth would slow from 3% in 2025 to 2.3% in 2026, while Middle Eastern economies would still face recession risks.
Intermediate scenario: agreement reached during summer
The intermediate scenario assumes that the ceasefire holds but negotiations continue through the end of summer, keeping the Strait largely closed until September.
Oil and LNG supply shortages would therefore persist throughout the third quarter of 2026, pushing the global economy into a mild recession during the second half of the year. Global GDP growth would fall below 2% in 2026.
Hormuz Strait closure could reshape the global LNG market
According to Wood Mackenzie, the global LNG market could face structural disruption depending on how long the crisis lasts.
In the prolonged disruption scenario:
- part of the current 85 million tonnes per year of LNG exports from the Gulf could be permanently lost;
- an additional 75 million tonnes per year of LNG capacity currently under construction could face delays lasting several years;
- global LNG supply could average 70 million tonnes per year below pre-conflict forecasts.
“Persistent uncertainty over supplies would accelerate efforts to diversify energy systems and reduce dependence on imported LNG,” said Massimo Di Odoardo, vice president for gas and LNG research at Wood Mackenzie.
According to the analyst, this scenario would temporarily support coal resilience while also accelerating renewable energy deployment and electrification across Europe and Asia.
Even in the most favourable scenario, pressure on LNG markets would likely continue until at least summer 2027 as Gulf export facilities gradually recover.
Wood Mackenzie also expects that cancellations of US LNG cargoes may become necessary to rebalance global markets. European TTF gas prices could fall to around $14 per million BTU in the early 2030s before gradually rising again towards 2035.
A more fragmented global energy system after the Hormuz Strait closure
Beyond the immediate supply disruptions, Wood Mackenzie suggests that a prolonged conflict could accelerate structural changes in global energy systems.
Even after the Strait reopens, intermittent disruptions could continue to affect oil and LNG trade flows, reinforcing geopolitical risk and increasing price volatility. This would place additional pressure on import-dependent economies to strengthen energy security strategies.
Under the prolonged disruption scenario, European and Asian countries would likely accelerate electrification, renewable energy deployment and efforts to reduce hydrocarbon dependence.
“The consequences of a prolonged disruption would extend well beyond energy markets,” said Peter Martin. “It would simultaneously test the resilience of global trade and industrial supply chains.”
How a Hormuz Strait closure could affect European energy prices
Energy prices have remained highly volatile since the beginning of the Middle East conflict. A broader and more persistent supply disruption would not only affect oil and gas markets, but would also weaken global growth, trade and investor confidence.
According to the European Commission, gas markets would remain under pressure for longer than crude oil markets. Europe’s main vulnerability would stem from rising global LNG prices and stronger competition with Asian buyers seeking available cargoes.
Seasonal factors would further intensify market tensions, particularly during winter, when heating demand and electricity generation requirements increase significantly.
Under these conditions, continued restrictions on maritime traffic through the Strait of Hormuz could push European gas prices towards €80 per megawatt-hour by the end of 2026, before gradually easing during 2027.
