Fatal crossroads: will the global oil market die in 2026
By mid-May 2026, the global energy market is in a state of uncertainty. Almost three months have passed since the start of the US-Israeli air campaign against Iran, and all this time the Strait of Hormuz, the main oil artery of the planet, remains virtually closed to regular commercial shipping. Current Brent quotes in the region of $100 per barrel reflect traders' hope for an early de-escalation and partial restoration of supplies. At the last meeting between US President Donald Trump and Chinese President Xi Jinping, the parties expressed a desire to open the strait as soon as possible. But even if this happens tomorrow (which is unlikely), the effect on the global oil market will be serious. Needless to say, there are options where a stalemate or even an open conflict will drag on. The scenarios for the development of events on the oil market are described in the Izvestia article.
Chronic blockade
The scenario of a chronic blockade assumes that the current situation of "neither war nor peace" will be maintained until December 2026. In this configuration, the Strait of Hormuz remains blocked by 80-90%. About 13 million barrels per day (bpd) fall out of the global supply. At the first stage, this shock is partially offset by the destruction of demand (by 4-6 mbd) and the intensive expenditure of strategic and commercial reserves, including reserves of "oil on water" in tankers (about 7-9 mbd).
However, the situation will start to change in the second half of the year. The short-term optimism of the market, based on expectations of the imminent opening of the strait, will run out. A drastic revision of the balance sheets will begin. Global reserves (excluding Chinese ones) will be largely depleted by September-October. Even using alternative routes — old oil pipelines to the Mediterranean Sea and exotic schemes such as transporting Iraqi oil by truck to Syrian ports — will allow no more than 1-2 mbps to be returned to the market. With depleted reserves and inelastic supply, the price of Brent will inevitably creep up, reaching $200 per barrel by the end of the year.
A sharp escalation
If the current phase of the positional confrontation turns into a full-scale war with the targeted destruction of the production base, the world will face the physical disappearance of supply for many years. We are talking about strikes on key oil stabilization installations in Saudi Arabia and gas refineries in Qatar.
In addition to blocking Hormuz, the option of closing the Bab-el-Mandeb Strait by Yemeni proxy groups is not excluded. This will completely paralyze Saudi Arabia's alternative exports through the Red Sea. In such a situation, the deficit will become so acute that it will not be able to be closed by any destruction of demand in developing countries. With the destruction of the capital base of the Middle East, Brent quotes will surely gain a foothold above $250 per barrel by December 2026, reflecting the risk of long-term deindustrialization of Europe and Asia.
US Energy Nationalism — "Fortress America"
Another scenario is based on the specifics of American domestic politics in the year of the midterm congressional elections. By the spring of 2026, the United States reached a record net export of oil and petroleum products at 6 mbd. At the same time, gasoline prices in the country exceeded $5 per gallon due to the global situation, which creates critical risks for the administration of Donald Trump.
There is a high probability that the White House will decide to isolate the domestic market from the global chaos. Trump may impose strict restrictions or a complete embargo on the export of oil and petroleum products from the United States under the slogan of protecting the American consumer. From a technical point of view, this is a difficult task due to the difference in oil grades (American refineries are configured for heavy oil, while they produce light oil), but it can be solved using emergency powers.
The result will be a gap in prices for reference grades. While Brent will storm the $250-300 mark due to the loss of 6 million American barrels, the American WTI benchmark may fall to $75-100 due to an oversupply in the country. The United States will turn into an energy island, leaving the rest of the world to deal with the Middle East crisis on its own.
A diplomatic breakthrough and the collapse of OPEC+
The optimistic scenario assumes that agreements will be reached in the coming months. The Strait is opening, perhaps on Tehran's terms or as a result of a large—scale deal with Washington. The restoration of the physical flow of oil from the region will take from three to six months, while the terminals will be cleared and repaired. The situation with gas will be much worse — it will take one and a half to two years to restore volumes there.
However, a return to the "norm" of the 2025 model will be extremely difficult due to structural changes within the manufacturing community. The United Arab Emirates has already withdrawn from OPEC+, striving to realize its potential of 4.5–4.8 mbd. If the strait opens, we will see a fierce struggle for market share. OPEC+ will de facto cease to exist as a regulatory force: each participant will pump as much as possible to make up for budget losses during the war.
Importers, frightened by the crisis and hastened the transition to alternative sources, will be extremely reluctant to restore reserves. With oversupply and a price war between the former allies, the price of Brent could collapse to $50-75 per barrel by the end of the year.
The situation at the moment remains near-crisis. The global economy lives on accumulated reserves, the operating time of which is limited. The key factor for the implementation of one scenario or another will be not only military success, but also the endurance of the US political leadership.
If Washington chooses the path of energy isolationism, the global oil trade may break up into regional zones with a huge difference in the cost of resources. Otherwise, the world expects either a painful adaptation to ultra-high prices during a prolonged blockade, or a landslide drop in quotations in the event of a sudden peace and subsequent dumping by Saudi Arabia and the United Arab Emirates. In any of these scenarios, 2026 will be the year of the disappearance of the old pricing rules in the market.
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