Barclays warns Hormuz stalemate could add $10 to Brent forecast

Barclays ↘ 1.27% warned on Friday that risks to its oil price forecasts are skewed higher depending on how long the impasse over the Strait of Hormuz lasts, outlining scenarios in which Brent crude could climb well above $100 per barrel and potentially test $150.money.usnews

The bank said that if the current situation persists for another one, two, or three months, there could be upside risk of $2, $7, or $10 per barrel respectively to its $96 per barrel 2026 Brent forecast. The warning came as oil prices spiked back to $100 per barrel this week for the first time since May, with renewed hostilities reviving investor concerns over global supply disruptions.cnbc+1

Escalating Conflict Chokes the Strait

The Strait of Hormuz, which carries roughly a quarter of global seaborne oil trade, has been largely blocked since Iran began disrupting traffic in late February following U.S. strikes. The crisis deepened in mid-July after President Donald Trump reimposed a naval blockade on Iranian shipping and proposed charging a 20% fee to guard the waterway.unctad+3

Vessel crossings through the Strait have collapsed. Lloyd's List Intelligence recorded just 53 transits in the week through July 20, down 66% from 157 the previous week, according to CNBC. Flows have dropped to around 15% of pre-war levels as Iran declared a blanket ban on maritime traffic and fresh attacks on commercial vessels prompted operators to pull back.cnbc

Strategic Reserves Under Strain

The International Energy Agency's chief, Fatih Birol, warned last week that global energy security is under serious threat unless oil flows improve soon. In the United States, the Strategic Petroleum Reserve drew down by 5.1 million barrels during the week ending July 17, leaving roughly 311 million barrels remaining, according to the Energy Information Administration.aljazeera+1

Barclays had already cut its 2026 Brent forecast from $100 to $96 per barrel in late June after a brief uptick in Hormuz flows. But renewed fighting — including U.S. strikes on Iranian military command centers and maritime capabilities completed on July 20 — and Trump's threat to destroy Iranian infrastructure for every ship attacked have reversed that easing.reuters+2

A Price Floor That Keeps Rising

Brent has surged roughly 35% so far in July as the conflict has intensified. A Brookings Institution analysis published in May warned that by mid-July, temporary supply buffers — including pipeline rerouting and emergency stockpile releases — would be largely exhausted, leaving a shortfall of about 7.1 million barrels per day to be absorbed by markets.brookings+1

Barclays first flagged a $150 tail-risk scenario in early March during the initial phase of the crisis. Five months later, with the Strait still effectively closed and hostilities escalating, that once-extreme figure has moved closer to the bank's base-case range.globalbankingandfinance