Oil prices are likely to remain above $100 per barrel in the near term as there is little sign of de-escalation in the U.S.-Iran conflict, analysts at OCBC said in a note.
The bank said the conflict has entered its third week with no credible diplomatic breakthrough, leaving flows through the Strait of Hormuz severely constrained and keeping global crude markets tight.
OCBC analysts expect Brent crude to hold around $100 per barrel through mid-2026, a sharp upgrade from earlier forecasts near $70, before easing towards $70 by early 2027 as disruptions gradually subside.
“Persistent shipping paralysis is forcing Gulf producers into output shut-ins, raising the risk that temporary disruptions evolve into longer-lasting supply losses,” OCBC’s commodity strategists said.
Tanker traffic through the strait has slowed to a trickle amid heightened security risks, effectively halting a key artery that accounts for roughly a fifth of global oil consumption.
While some vessels have resumed limited transit following Iranian checks and signals of potential inventory releases from the International Energy Agency, overall flows remain far below normal levels.
Mitigating measures -- including alternative pipeline routes, strategic reserve releases and continued Iranian exports -- could offset up to 10 million barrels per day, OCBC said, but would still leave a significant supply gap in the event of a prolonged disruption.
The bank added that oil markets are now approaching a “moderately severe” supply shock scenario, with risks skewed to further upside if tensions persist.
Source: Investing