Capital Economics Sees Brent Above $150 Through 2027 as Iran War Risks Deepen
Updated
Updated · Reuters · May 15
Capital Economics Sees Brent Above $150 Through 2027 as Iran War Risks Deepen
5 articles · Updated · Reuters · May 15
$150 Brent through end-2027 is Capital Economics' extreme-case forecast if the Iran war escalates beyond its baseline and adverse scenarios.
The bank's adverse case puts Brent at $130 by mid-year after further energy infrastructure damage, while a prolonged Strait of Hormuz closure and falling OECD inventories could push prices to at least $140 by end-June.
Brent was already up 3.4% at $109.29 on Friday, with WTI rising 3.7% to $104.88 after Donald Trump said his patience with Iran was running out and peace talks over ship attacks and seizures showed little progress.
A sustained $150 oil price would lift advanced-economy headline inflation by about 2.5 percentage points in the second half of 2027 on average, and stronger Asian summer LNG demand plus a cold European winter could send TTF gas to 100 euros per MWh.
If the Strait of Hormuz remains closed for months, how might global energy and food security be permanently reshaped?
Could the world’s reliance on strategic reserves and bypass pipelines withstand a prolonged supply shock, or is a new approach needed?
Global Oil Supply Down 10%: The 2026 Iran Conflict’s Economic, Policy, and Geopolitical Fallout
Overview
The Iran conflict that began in March 2026 caused a sharp reduction in oil flows near the Strait of Hormuz, leading to higher shipping costs and less available crude oil. This disruption triggered significant volatility in global oil markets, with crude prices rising quickly throughout March. The market reacted strongly, as seen in the widening price gap between Brent and WTI crude, with Brent prices increasing more due to its greater exposure to shipping disruptions. These immediate effects set off a chain reaction, fueling inflation, raising recession risks, and forcing governments and markets worldwide to adapt to a new era of energy uncertainty.