Global | Oil this year and the risks of a prolonged conflict

The year 2026 has been framed by relentless geopolitical tension in the Middle East. This situation has led the oil market, primarily, but also others such as gas or fertilizers, to behave in a highly volatile manner with strong upward pressures. It is worth taking stock of what has happened and considering the possible scenarios for commodities, especially oil, for the remainder of the year. 

The origin of this situation is the conflict between the United States, Israel, and Iran, which began on February 28. Until then, the oil market was pointing toward an oversupply and a drop in prices. Until shortly before the conflict, Brent had been trading since the beginning of the year at an average of 66.8 dollars per barrel. The initial price response to the conflict was somewhat timid, reflecting the market's expectation of a quick resolution favorable to the interests of the United States and Israel. However, analysts underestimated the duration and difficulty of the crisis, which very quickly escalated, involving some of Iran's proxy groups as well as attacks on infrastructure in other countries in the region.

The importance of the conflict for oil lies in the fact that approximately 20% of the world's oil passes through the Strait of Hormuz, one of the most critical geographical points for global trade and the oil market. Iran's response to the attacks was to close the passage through Hormuz, which generated a high level of stress in the oil market. A useful comparison to understand its scale is the oil embargo of the 1970s by Middle Eastern countries, which at the time implied a 5% restriction of global supply (although at that time, the intensity of use per unit of GDP was higher and the price shock in real terms was much more significant). 

In the end, the effects have been much smaller than estimated, thanks to different mechanisms that have been put in place to compensate for the blockade of Hormuz. Among them are the diversion of crude oil through pipelines in Saudi Arabia and the United Arab Emirates; the increase in production in several countries, mainly in the Americas; the increased use of biofuels; and the reduction in demand for the constitution of reserves, especially in China. But perhaps the most relevant piece is the coordinated decision to use global oil reserves. As a result, the effect on the market was reduced to about 4%, a situation that allowed the pressure on the price of oil to be contained.

In recent months, the conflict has seen significant progress and setbacks; a preliminary agreement to reopen the Strait was even signed, but confrontations between the parties and the resumption of attacks led to its termination and a new round of pressures, which for the moment still seem far from a possible solution. This leads us to ask: what can we expect from the price of oil for the rest of the year and in the future?

In principle, if an agreement is reached in the coming weeks, and based on OPEC's supply increases, one could expect a relatively rapid drop in price to levels close to 70 dollars per barrel. An alternative is that the conflict continues and mobility restrictions and some targeted attacks continue to occur, which would keep the price around 90-95 dollars per barrel for a few weeks. However, in this scenario, time would be the main challenge, as the capacity to resort to reserves is limited and a more pronounced reduction in oil supply would end up causing new price hikes. Surely, the result will be somewhere in between both scenarios, and it will also be determined by political sentiment, especially in the United States with the November elections. 

For the moment, uncertainty will continue to reign in this market, and its economic impacts could intensify in the coming quarters.

Press article. Published in Expansión on September 2, 2026.