The Middle East crisis has left oil markets on edge, and the volatility is expected to continue. Prices are likely to stay high, even as forecasts vary on how long the surge will last, with the ongoing conflict still disrupting global supplies. Prices edged lower on Friday but held firmly above the $100 mark, reflecting the impact of damaged energy infrastructure and restricted flows through the Strait of Hormuz. Brent crude slipped 0.1% to $108.5 a barrel after earlier touching $110, while US crude remained largely steady at around $95.6.The big question is, how high and long can this hike stretch?Market projections suggest the current price levels could persist, especially if supply disruptions continue. Goldman Sachs said oil that markets could remain under pressure for years, warning that prolonged outages may keep prices elevated well beyond the immediate term. “The persistence of several prior large supply shocks underscores the risk that oil prices may stay above $100 for longer in risk scenarios with lengthier disruptions and large persistent supply losses,” Goldman analysts wrote in a note Thursday.With the key shipping route in the Strait of Hormuz largely blocked for nearly three weeks, the bank expects prices to move higher and has indicated that Brent could even surpass its previous peak of about $147 per barrel recorded in 2008 if the disruption worsens.Goldman outlined different scenarios based on how the situation evolves. In a more severe case, where oil flows remain heavily restricted for over two months and production recovers only gradually to 2 million barrels per day, Brent could be around $111 per barrel by the final quarter of 2027. However, in a more optimistic scenario, involving a gradual restoration of flows from April, could see prices ease to the $70 range by the end of 2026.Other forecasts point to a softer trajectory over time. The US Energy Information Administration expects Brent to stay above $95 per barrel in the near term, before dropping below $80 in the third quarter of 2026 and settling around $70 by the end of that year. It projects an average price of $64 per barrel in 2027, noting that outcomes will depend on how long the conflict lasts and the extent of supply disruptions.In a staff memo, United Airlines chief executive Scott Kirby said the airline is factoring in the possibility of oil prices rising to as much as $175 per barrel and staying above $100 through the end of 2027. At those levels, United’s annual fuel expenses could increase by about $11 billion, more than twice the profit it recorded in its best year, he said, even as strong travel demand allows carriers to raise fares. United Airlines said that it will reduce unprofitable flights over the next two quarters as it prepares for elevated jet fuel prices linked to the war involving Iran. The impact of the crisis is already being felt across the energy sector. QatarEnergy said that missile strikes have cut liquefied natural gas export capacity at Ras Laffan by 17%, with repairs potentially taking up to five years, affecting supplies to Europe and Asia.Overall, projections underline a wide range of possible outcomes, but point to one common factor, oil prices are likely to remain sensitive to how the conflict unfolds and how quickly disrupted supply routes are restored.
