• Brent crude is projected to average around $113 per barrel in Q2 as markets price in persistent supply risks from the Strait of Hormuz.
  • Analysts warn that prolonged disruptions could strain global oil reserves, amplifying inflationary pressures and economic costs.
  • Political and military developments remain the key swing factors, with no clear resolution in sight to reopen the critical chokepoint.

Oil markets are bracing for continued volatility as the Strait of Hormuz—a vital conduit for about a fifth of global oil supply—remains effectively closed, keeping Brent crude prices elevated despite mixed political signals. According to recent analyses from Oxford Economics, Brent is expected to average around $113 per barrel in the second quarter, reflecting a significant risk premium tied directly to the strait's uncertain status.

Efforts to reopen the waterway have hit a snag, with regional hostilities and U.S.-Iran tensions contributing to a prolonged slowdown or halt in traffic. Without a deal to restore flows, supply disruptions are likely to persist, maintaining upward pressure on prices. "The main risk remains the Strait of Hormuz," one market analyst noted, speaking on condition of anonymity due to the sensitivity of ongoing assessments. "With no clear plan to reopen it, we're seeing a steady drain on market confidence."

In the near term, Brent is likely to hover in the low-to-mid $100s per barrel, with volatility spiking on any headlines about military actions or diplomatic breakthroughs. Market participants are closely watching for announcements from major powers, which could rapidly swing prices. For now, the window for a swift resolution appears narrow, and some reports suggest that even temporary closures historically push prices up, with current scenarios keeping the risk premium intact.

The longer the strait stays closed, the less effective strategic reserves become, raising costs for the global economy. Higher oil prices are already translating into broader inflationary effects, impacting manufacturing, transportation, and consumer energy bills. Economies heavily reliant on imported oil, especially those with weaker domestic energy security, are particularly vulnerable to sustained disruptions.

Looking ahead, the price path hinges largely on supply responses—including potential OPEC+ production adjustments and non-OPEC supply growth—as well as any credible plans to reopen Hormuz. While some forecasts call for moderation if normal flows resume, risks remain skewed to the upside due to geopolitical surprises. As one industry insider put it, "It's a waiting game, and every day of uncertainty adds to the premium."

Correction: An earlier version of this article misstated the timeframe for Brent price projections; it refers to Q2, not 2026.