Analysts widely concur that even after the cessation of hostilities, international oil prices will remain elevated for a considerable period and are unlikely to swiftly retreat to pre-conflict levels. Assessments indicate that production facilities in several oil-producing nations have sustained damage during the conflict, presenting significant challenges to restoring output capacity. Should hostilities conclude this month and the Strait of Hormuz gradually reopen, a full recovery in crude oil production could still require three to four months. Concurrently, international crude oil prices are projected to stay high until the end of 2027, with prices of certain refined products, including fuel oil, not expected to return to pre-conflict levels until 2028. The current surge in oil prices has surpassed the increases observed during the 2011 Libyan war and the onset of the 2022 Russia-Ukraine conflict, constituting a "sudden supply shock" that is difficult to resolve in the short term. The report highlights that as the final tankers dispatched before the blockade of the Strait of Hormuz are anticipated to reach their destinations around April 20th, the "pre-blockade inventories" within the global supply chain will be entirely depleted, signaling that the oil supply shock is "fully materializing." Furthermore, if shipping disruptions through the Strait of Hormuz persist for an additional month, the average price of Brent crude futures for 2026 could exceed $100 per barrel. Should the disruption extend further, the average price in the third quarter might reach $120 per barrel.
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