Recent unpredictable developments in the military conflict involving the United States, Israel, and Iran have triggered significant volatility in international oil prices, impacting various aspects of the global economy. Multiple variables are influencing the direction of oil prices, including the conflict's duration, navigation conditions in the Strait of Hormuz, and the extent of damage to energy infrastructure in Gulf nations. Analysts widely believe that even after hostilities cease, oil prices are likely to remain elevated and volatile for a considerable period, with a rapid return to previous levels appearing unlikely.
Market sentiment continues to be a major driver of oil price movements. Since early April, international oil prices have retreated from earlier peaks, influenced by factors such as temporary cease-fires and negotiations between the US and Iran, currently holding around $90 to $100 per barrel. In the short term, the progress of diplomatic talks and the trajectory of the conflict remain the decisive variables for near-term price trends. Following hints from the US on the 14th suggesting a potential return to negotiations, international oil prices fell sharply, with some crude futures contracts on the New York market dropping nearly 8% that day.
Analysis suggests that current oil prices are being driven more by news and sentiment than by fundamental supply-demand balances. Nikolay Kozhanov, an associate professor at Qatar University's Gulf Studies Center, noted that the longer navigation through the Strait of Hormuz remains obstructed, the longer oil prices will stay high. He believes that measures like supply diversification and adjusting transport routes cannot effectively calm market恐慌.
A recent analysis from Goldman Sachs projected that if the Strait of Hormuz remains "obstructed" for another month, the average price of Brent crude futures for 2026 could exceed $100 per barrel. Should the disruption persist longer and Gulf crude supplies continue to diminish, prices could climb further, potentially reaching an average of $120 per barrel in the third quarter. Judging from recent statements by involved parties, a swift and comprehensive resolution to the conflict appears unlikely in the short term, suggesting continued volatility in oil prices.
The global oil supply crisis is transitioning from a warning phase to a phase of tangible impact. Natasha Kaneva, Head of Commodities Strategy at J.P. Morgan, recently stated in a report that as the final tankers dispatched before the Strait's closure are expected to reach their destinations around April 20th, the "pre-blockade inventories" within the global supply chain will be fully depleted, indicating that the oil supply shock is "fully unfolding."
In international crude markets, futures prices reflect expectations, while spot prices reflect immediate scarcity. In early April, the price of Dated Brent, a benchmark for approximately two-thirds of global physical crude trade, surged dramatically, briefly reaching $144 per barrel and creating a spread of over $30 compared to futures prices at the time. This signaled extreme tightness in physical crude oil supplies.
The Macquarie Group estimates that by the end of March, approximately 13% of global oil production was forcibly halted, with around 16 million barrels per day of crude oil unable to reach the market. Professor Kozhanov points out that unlike supply disruptions caused by sanctions, the current situation not only obstructs trade routes but also directly impairs the export capacity of oil-producing nations.
The latest report from the International Energy Agency indicates that in early April, shipments through the Strait of Hormuz remained severely restricted. Daily loadings of crude oil, liquefied natural gas, and refined products stood at 3.8 million barrels, far below the February average of over 20 million barrels per day. The agency characterized this price surge as a "sudden supply shock," noting that its speed and magnitude exceed those seen during the 2011 Libya war and the escalation of the Ukraine crisis in 2022, presenting a challenge difficult to resolve quickly.
Analysts express concern that even if the conflict ends, the current supply-demand imbalance will be difficult to alleviate swiftly. Many oil-producing countries have been forced to suspend portions of their production capacity, temporarily shut down oil wells, or have suffered damage to production facilities, making the restoration of full capacity highly challenging.
An article published by Spain's *El Confidencial* website stated that due to attacks on energy infrastructure and saturated storage facilities, crude oil production could take months to recover, meaning the market will maintain a higher risk premium for some time. Sheikh Nawaf Al-Sabah, CEO of Kuwait Petroleum Corporation, also indicated that a full restoration of production might take three to four months after the conflict concludes.
Analysis from *The Economist* suggests that even if the Strait of Hormuz reopens, normalizing energy markets would require at least three steps. First, producer nations must restore output to pre-conflict levels. Second, vessels must be available to transport this production to overseas refineries. Third, refineries must process the crude into usable fuels. Each stage will require significant time.
The U.S. Energy Information Administration predicts that, assuming the conflict ends this month and the Strait of Hormuz gradually reopens, crude oil prices will remain elevated until at least the end of 2027. Some refined products, including fuel oil, may not return to pre-conflict levels until 2028.
Some observers believe that the geopolitical conflict has structurally raised the price floor for oil. While exacerbating energy supply risks, it has also prompted economies to recognize more profoundly the importance of energy transition. In the long term, the global energy landscape is likely to evolve towards greater diversification and lower carbon intensity. As the traditional dominance of oil is challenged and the role of renewable energy is further elevated, international oil prices may trend downward over time.