Key Points:
- Barclays predicts Brent crude could test $120 a barrel soon.
- The bank warns that the worst-case scenario could push prices to $150.
- The Strait of Hormuz is effectively closed to commercial shipping.
- Roughly 85 million barrels of oil are currently stranded on tankers.
Global oil markets are bracing for a massive price shock. Analysts at Barclays issued a stark warning on Friday, stating that Brent crude could hit $120 a barrel if the current conflict in the Middle East continues for another two weeks. This bold prediction highlights how quickly the situation is deteriorating.
While $120 might seem incredibly high to some investors, Barclays stands by its numbers. The bank noted that people felt pessimistic about oil prices heading into 2026, but the current reality is grim.
Analysts argue that the underlying market fundamentals are actually stronger now than during the start of the Russia-Ukraine war, which previously drove prices to similar extremes. The risks in the Middle East today are simply bigger.
The core of the crisis lies in the Strait of Hormuz. This vital waterway handles about one-fifth of the world’s daily oil and liquid natural gas supply. Right now, it is effectively closed. After Iran threatened to fire on passing commercial vessels, shipping companies stopped sending their tankers through the area.
This blockade is causing a massive traffic jam at sea. According to Barclays, about 85 million barrels of oil are currently stranded on tankers stuck in the Middle East Gulf since the fighting began. As of late Friday, Brent crude futures traded around $93.60 per barrel, while West Texas Intermediate sat at $91.62.
Diplomacy seems unlikely to fix the problem quickly. On Friday, U.S. President Donald Trump dramatically escalated the rhetoric, demanding the “unconditional surrender” of Iran. This hardline stance makes a swift, negotiated end to the week-old war much less probable.
The ripple effects are already hitting neighboring countries. Barclays reported that oil production shutdowns have already started in Iraq and Kuwait because they cannot ship their product out. If the conflict drags on, these shutdowns will likely spread to the United Arab Emirates and Saudi Arabia.
In a worst-case scenario, the bank warns that Brent crude could skyrocket to $150 a barrel before the end of the month.
