A. SREENIVASA REDDY (ABU DHABI)

Brent oil prices could reach $135 per barrel if the current situation persists for four months, an oil market expert has said.

“The market is currently grappling with physical supply being choked off by drone strikes, while Middle Eastern producers are hitting a critical point where they must shut in production simply because there is nowhere left to put the oil,” said Janiv Shah, Vice President for Oil Markets at Rystad Energy.

Elaborating on the present situation, Shah added: “The forward-looking analysis we’ve done on a two-month basis is showing prices will stay above $110 per barrel, given the current conditions.”

With refineries already curtailing throughput as a defensive measure, the focus has shifted entirely from profit margins to national energy security, making current oil prices a tangible threat to global stability, Shah added.

Rystad Energy had earlier expected Brent to average around $60 per barrel under a pre-war scenario, when the market was projected to face a substantial surplus of about 2.6 million barrels per day.

The consultancy has outlined two possible scenarios for oil price movements.

Under the first scenario, the conflict lasts roughly two months, with the Strait of Hormuz gradually reopening to oil flows by the end of March. In this case, Brent prices could rise above $110 per barrel in April before gradually declining as supply flows normalise, reaching around $70 per barrel by the end of the year.

In the second scenario, where the disruption extends to four months, Brent could reach around $135 per barrel by May before easing to about $85 per barrel by the end of the year as the market begins to stabilise with improving supplies.

Under this longer disruption scenario, the resulting average oil price for 2026 would be around $100 per barrel, according to Rystad Energy.

Global benchmark Brent was swinging around $94 per barrel on Tuesday after having smashed through and held above $100 for most of the previous trading session.

Oil prices plunged after US President Donald Trump said the Iran war would end soon. Trump also indicated plans to waive oil-related sanctions and have the US Navy escort tankers through the Strait of Hormuz.