Oil has completed a dramatic journey from $60 a barrel at the start of the year to $100 and beyond — hitting $119 at this week’s peak — and the question now is what comes next for a global energy market that has been fundamentally destabilized by the Middle East conflict. Brent crude settled around $98 Thursday after briefly touching $100.29, suggesting that markets are consolidating in triple-digit territory rather than retreating to pre-conflict levels. The path forward depends almost entirely on whether and how quickly the conflict can be resolved.
Iran continued striking Gulf energy targets Thursday, hitting merchant ships near the Strait of Hormuz, fuel tanks in Bahrain, tankers near Iraq’s ports, and facilities adjacent to Oman’s Mina Al Fahal terminal. Three crew members aboard the Thai vessel Mayuree Naree were reported trapped. Iraq shut all crude exports and Oman cleared its main terminal. Bahrain placed residents under shelter-in-place orders.
The optimistic scenario involves a negotiated ceasefire within weeks, a gradual reopening of the Strait of Hormuz, and a managed reconstruction of disrupted export facilities. Even in this scenario, Goldman Sachs now sees Brent at $71 per barrel in Q4 2026, far above pre-conflict levels. The pessimistic scenario — warned of by Iran’s military — involves $200 oil and a prolonged stagflationary shock.
The IEA released 400 million barrels of emergency crude from 32 member nations. The US contributed 172 million barrels from its Strategic Petroleum Reserve. These measures provide a bridge but not a solution. President Trump pledged to continue military operations. Deutsche Bank warned of stagflation risk.
Japan’s Nikkei fell 1.6%, South Korea’s Kospi lost 1.2%, and European gas prices climbed 7.7% for a second consecutive day. The world’s energy markets are at a crossroads, and the direction they take will shape the global economic outlook for years to come.