Hormuz crisis may push Brent toward $100 amid US-Iran conflict: Analyst

The global economy is currently navigating a "red alert" phase as the escalation of military hostilities in the Middle East transcends regional borders, morphing into a systemic threat to international energy markets and financial stability. Crude oil benchmarks have shot up 30 per cent year-to-date (YTD) and threaten to derail the economic expansion, falling into recession. Following the launch of Operation Epic Fury - a coordinated US-Israeli campaign targeting Iranian leadership and nuclear infrastructure - the world is witnessing a violent decoupling of asset prices from their early-year optimism.

The Chokepoint crisis: Hormuz and the tanker crunch

The Strait of Hormuz, a 21-mile-wide artery through which 20 per cent of the world’s petroleum and LNG flows, is now effectively a no-go zone. IRGC claims to have taken full control of the Strait, adding to the risk to global trade. The withdrawal of protection and indemnity (P&I) insurance and a 70 per cent collapse in maritime traffic have rendered the waterway impassable for commercial fleets.

 

The impact on the global tanker market has been instantaneous and severe. Rates for Very Large Crude Carriers (VLCC) on the Middle East Gulf-to-China route have skyrocketed to over $425,000 per day as of this week, a jump of 75 per cent in a week. The market is further strained by a divergence in availability:

 

VLCCs: Massive congestion as hundreds of tankers anchor outside the Strait, awaiting security clearances.

 

Panamax/Mid-size: While Aframax and Suezmax vessels have found some utility in alternative Atlantic routes, the sheer volume of "trapped" tonnage in the Persian Gulf has created a global shortage of available spot-market bottoms.  ALSO READ | Strait of Hormuz closure risk a 'transit shock' for India: Kotak Securities

The Gas gap: Qatar’s LNG paralysis

While crude oil often dominates the headlines, the 2026 crisis has revealed a deeper vulnerability in the Liquefied Natural Gas (LNG) sector. Following drone strikes on processing facilities in Ras Laffan, Qatar - which accounts for 20 per cent of global LNG exports - has suspended production.

 

Unlike the oil market, where strategic reserves offer a temporary cushion, the global LNG supply chain lacks structural buffers. European benchmark gas prices have jumped 50 per cent in 48 hours, as the continent (with storage at a meagre 30 per cent capacity) competes with Asian giants like India and China for dwindling spot cargoes. For India, which sources nearly half of its LNG through the Strait, the disruption is not just a price shock but a threat to industrial continuity, and that has already reflected on the rupee.

Macroeconomic fallout: Inflation and the equity sell-off

The "war premium" has pushed Brent crude toward the $100 per barrel threshold, reigniting stagflation ary fears that central banks thought they had conquered. This has triggered a broad global equity sell-off. The S&P 500 and European STOXX 600 have retreated sharply as investors move toward a "risk-off" posture, fearing that higher energy costs will erode corporate margins and force interest rates to stay higher for longer.

 

We are no longer looking at simple volatility, as these are structural issues which will create a dent as a global investment destination if energy infrastructure in the GCC -  including desalination plants and refineries -  becomes a sustained target for Iranian retaliation, the floor for global growth drops significantly.

The Iran factor: Targeting the infrastructure

The ultimate "black swan" remains the physical integrity of the regional energy infrastructure. Iran’s "active defence" strategy has shifted from military-to-military engagement toward targeting the economic lifeblood of the Gulf. With reports of fires at the Fujairah oil hub and the Rumaila field in Iraq shutting down due to storage exhaustion, the risk is no longer just about moving oil but producing it.

 

As the conflict enters its second week, the likelihood of a short-lived disruption is diminishing. Without rapid de-escalation or meaningful improvements in maritime security, the 2026 Middle East crisis could mark a new phase of global economic fragmentation. Brent prices are on track to approach $100 in the coming days, and with each one-million-barrel supply loss typically adding about $5 per barrel, a potential move toward $120–$150 cannot be ruled out.  (Disclaimer: This article is by Mohammed Imran, research analyst. Mirae Asset Sharekhan. Views expressed are his own.)