Forecasts from Rystad Energy suggest that if the conflict lasts two months, Brent could remain around $110 per barrel, while a four-month scenario could push prices to about $135 by June.
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Global oil markets have entered a new phase of volatility, with Brent crude oil surging past $110 per barrel this weekend to its highest level since 2022, as escalating conflict in the Middle East disrupts supply chains and threatens a prolonged energy shock with far-reaching economic consequences.
The sharp rise in prices reflects mounting fears of real supply destruction rather than speculative risk. Attacks on key infrastructure, including refineries and gas fields, alongside the effective closure of the Strait of Hormuz, have severely constrained the flow of crude and liquefied natural gas (LNG) into global markets.
The waterway is a critical artery for global energy trade, and its disruption has already triggered significant supply bottlenecks and logistical challenges.
According to analysis in a recent report by Moody’s Ratings, as long as the disruption persists, oil and gas exports from the Gulf region remain constrained, amplifying price pressures and increasing macroeconomic risks.
Markets are increasingly pricing in a sustained disruption rather than a swift diplomatic resolution. This comes even after the International Energy Agency authorised the largest emergency reserve release in its history — 400 million barrels — with the United States committing 172 million barrels from its Strategic Petroleum Reserve over 120 days.
However, plunging tanker traffic and ongoing attacks on vessels have largely outweighed the stabilising effect of emergency inventories.
Brent spiked above $110 per barrel after strikes on Iran’s South Pars gas field. Prices have since surged further, with intraday levels reaching as high as $119 per barrel.
Energy analysts say the market is shifting into a phase where supply disruptions, rather than speculation, are driving prices. Forecasts from Rystad Energy suggest that if the conflict lasts two months, Brent could remain around $110 per barrel, while a four-month scenario could push prices to about $135 by June.
Economists warn that the impact of the oil shock is spreading across the global economy, raising inflation risks and weakening growth prospects.
"With Brent crude trading above $100/barrel for the second consecutive week, inflation outlooks have shifted materially and rate-setters across the G7 are now navigating a tension between energy-driven price pressure and the drag that elevated energy costs will impose on growth," said Bianca Botes, director of Citadel Global.
Oxford Economics Africa now expects oil prices to average around $113 per barrel in the second quarter, while global inflation is projected to rise as higher fuel, fertiliser and transportation costs ripple through the economy.
The firm has also cut its world GDP growth forecast for 2026 to 2.6% from 3.0%, reflecting weaker consumer spending and investment.
Ben May, director of global macro research at Oxford Economics Africa, said the evolving conflict has forced a major reassessment of global forecasts.
“Our revised baseline assumes a prolonged conflict and increased energy disruption,” May said. “It has become increasingly clear that the US/Israel-Iran conflict will cause a more drawn-out period of disruption to energy production in the Middle East and shipping traffic through the Strait of Hormuz.”
May added that their updated outlook assumes the conflict could last around two months, keeping the Strait effectively closed until the end of April, before gradually improving thereafter.
However, he cautioned that even after a truce, energy flows may take months to normalise due to logistical challenges, infrastructure damage and higher shipping insurance costs.
For South Africa, the surge in oil prices poses a significant challenge. As a net importer of crude oil and refined fuel products, the country is highly vulnerable to global price shocks. Higher crude prices directly translate into rising fuel costs domestically, which then filter through to transport, food and other essential goods.
This could intensify inflation pressures at a time when households are already facing elevated living costs. Higher fuel prices also raise operating costs for businesses, potentially slowing economic activity and complicating policy decisions for the South African Reserve Bank.
The rand has already shown sensitivity to global developments, strengthening temporarily alongside broader currency movements but remaining vulnerable to oil-driven volatility.
This comes at a time when South Africa’s economic recovery remains fragile, raising concerns about slower growth and potential monetary policy tightening if inflation accelerates.
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