Pessimistic outlook for global energy markets
Global investment bank Morgan Stanley issued an analytical report that has alarmed energy markets, revealing that the continued closure of the Strait of Hormuz until next June will place immense pressure on the safety margins that currently restrain oil prices, potentially pushing them to record lows. In this escalation scenario, the bank indicated that Brent crude prices could range between $130 and $150 per barrel after July, posing a significant challenge to a global economy already grappling with inflationary pressures.
The strategic importance of the Strait of Hormuz
The Strait of Hormuz is one of the world's most important waterways, if not the most important, for energy supplies. Connecting the Persian Gulf to the Gulf of Oman, it carries approximately 21% of the world's daily oil consumption, making it the planet's main "oil artery." Historically, the strait has always been a point of geopolitical tension, particularly between Iran and Western countries led by the United States. Any disruption to navigation through it, whether partial or complete, would cause an immediate shock to oil markets due to fears of supply shortages, a concern reflected in Morgan Stanley's recent forecasts.
Morgan Stanley's scenarios: Between optimism and pessimism
The bank outlined two main scenarios for future oil prices. The baseline, and more optimistic, scenario assumes the Strait of Hormuz reopens before the US is forced to reduce its exports and coincides with a rebound in Chinese import demand. In this case, the bank expects prices to reach $110 per barrel during the second quarter of this year, then decline to $100 in the third quarter, and stabilize at $90 in the final quarter.
The worst-case scenario would unfold if the shutdown extended into late June or July, inevitably leading to a price surge to the $130-$150 range. This spike would be driven not only by the actual supply shortage but also by market panic and speculation that would accompany such a critical event.
Wide-ranging economic impacts
Oil prices reaching these high levels will have serious repercussions for the global economy. Internationally, this will exacerbate inflation, increase production and transportation costs, and potentially push major economies into recession. Regionally, oil-exporting Gulf states will benefit from massive revenues, while importing countries in the region, such as Jordan and Egypt, will face severe economic crises. Domestically, for consumers worldwide, this means significantly higher fuel prices and energy bills, reducing their purchasing power.
Aligned expectations and long-term challenges
Morgan Stanley's view aligns with other analyses, as Fitch Ratings raised its oil and gas price forecasts for 2026 and 2027, indicating that the repercussions of a disruption to shipping in the Strait of Hormuz could last longer than anticipated. Forecasts suggest that oil markets could lose up to one billion barrels by the end of 2026, even if the strait were to reopen immediately, due to the time required to restart oil fields, repair refineries, and get tankers to their destinations. This underscores that the impact of any disruption to this vital artery extends for years.
