Energy analysts at Bernstein Research have warned that a prolonged closure of the Strait of Hormuz could trigger a significant surge in oil prices, potentially reaching between $US120 and $US150 a barrel. The firm suggests the potential impact on energy markets could be more severe than the 1973 OPEC embargo. Bernstein Research provides in-depth analysis and insights into various sectors, helping investors make informed decisions. The firm offers a range of research services to institutional clients.
According to Bernstein’s analysis, demand destruction is anticipated if prices remain between $US120 and $US140 a barrel. They caution that prices climbing to around $US150 would introduce “material recession risks” into the global economy. The Strait of Hormuz is a critical transit route for global energy supplies.
For the LNG market, the disruption of exports from major producers like Qatar and the UAE would remove approximately 83 million tonnes annually. Bernstein equates this to the loss of Russian gas in 2022, an event that propelled spot gas prices to $US40 per million British thermal units. This level of disruption could have significant implications for energy markets.
Bernstein has increased its 2026 forecast for north Asian benchmark LNG prices to $US15 per million British thermal units, up from $US9. They also suggest that prices could surge to between $US35 and $US40 in the event of a prolonged closure of the Strait. Additionally, the firm revised its Brent oil forecast for 2026 to $US80 a barrel, a notable increase from its previous forecast of $US65, while its long-term estimate remained unchanged.
