Hormuz Crisis Keeps Oil Above $94 and Redraws Global Energy Supply Map

Brent crude prices are holding firm at around $94 per barrel, driven by the ongoing disruption in the Strait of Hormuz since February 2026, following an air campaign launched by the United States and Israel against Iran, which was succeeded by an Iranian retaliation involving minelaying and attacks on shipping tankers and US bases in the region.

Reports estimate that the strait impedes nearly 25% of global oil flows. The severity of the attacks peaked in mid-July, before Iran-Oman diplomatic talks produced a degree of de-escalation that contributed to stabilizing prices rather than lowering them, reflecting the market's pricing of an ongoing risk premium rather than an imminent solution.

The repercussions of the crisis extend to exporting Gulf economies, with data indicating a 6.8% quarter-on-quarter decline in Saudi oil activities in the first quarter, while the World Bank lowered its growth forecast for GCC countries from 4.5% to a contraction of 2.4% for the current year.

Analysts point out that the Hormuz crisis has become the world's largest geopolitical market risk today, and that any genuine diplomatic breakthrough would lead to a sharp reversal in oil prices, whereas the continuation or escalation of the disruption will push energy prices toward levels not seen since 2022.

What do these terms mean?

Geopolitical Risk Premium: The portion of the oil price that reflects the likelihood of supply disruptions due to conflicts rather than fundamental supply and demand factors, rising as tensions escalate.

Strait of Hormuz: A narrow waterway connecting the Persian Gulf to the Arabian Sea, through which nearly 25% of global oil trade passes, making any disruption there have a direct impact on global prices.

Price Reversal: A sudden shift in the direction of a commodity price; in the context of oil, it typically occurs upon the announcement of a ceasefire or the reopening of shipping lanes.