Analyst forecasts sustained oil prices above $100

FXTM’s Head of Market Research, Lukman Otunuga, has forecast that oil prices will remain above $100, noting that stalled talks alongside physical shipping bottlenecks have combined to create what he described as a “perfect storm” for energy benchmarks.

Global energy markets are bracing for a prolonged period of high costs as extreme supply tightness and geopolitical brinkmanship threaten to cement triple-digit oil prices as the “new normal”.

Following the collapse of critical diplomatic talks and a looming U.S. blockade of the Strait of Hormuz, Brent crude has surged to roughly $104 a barrel.

“Deepening conflict may keep oil prices elevated, with triple digits potentially becoming a new normal amid extreme supply tightness,” Otunuga warned in a market briefing on Monday.

The primary catalyst for the price explosion is the escalating friction between the U.S. and Iran. After 21 hours of failed negotiations in Islamabad, Pakistan, over Iran’s nuclear programme and maritime control, the U.S. has vowed to blockade vessels passing through the Strait of Hormuz, a chokepoint that has been effectively restricted since late February.

The market reaction was immediate, with Brent rallying as much as nine per cent as supply shock fears returned to the forefront of investor concerns.

“Given how Iran has rejected US restrictions on shipping and threatened Gulf ports, sentiment remains fragile and highly sensitive with markets on high alert.

“Oil benchmarks surged as the US vowed to blockade all vessels passing through the Strait… supply shock fears returned with a vengeance,” Otunuga said.

The surge in energy costs is already rippling through other asset classes. Gold has found itself on the back foot despite the chaos; while typically a haven, the metal is being weighed down by a stronger dollar and fears that $100+ oil will trigger a fresh wave of global inflation.

The situation also places central banks in a difficult position. While some, like the Central Bank of Nigeria, may look to cut rates as local inflation eases toward a projected 13.4 per cent, global peers are being forced to consider further hikes to combat “conflict-induced inflation”.

“This fresh uncertainty was reflected across markets this morning, with risk aversion affecting equities.

“The Strait of Hormuz has been effectively closed since late February, raising the risk of inflation and growth shocks that threaten the global economy,” Otunuga added.

The peace talks in Islamabad involving U.S. Vice President J.D. Vance and Iranian officials collapsed this past weekend. The primary sticking point remains disagreement over Iran’s nuclear programme and long-term security commitments.

In response to the deadlock, President Trump has ordered a U.S. Navy blockade of Iranian ports effective Monday, 13 April 2026. Iran’s Revolutionary Guard has since threatened to close the Strait entirely to military vessels, describing the waterway as a “deadly vortex” for its enemies.

Brent Crude continues to hover near $104/bbl, having touched $120/bbl during earlier bouts of extreme volatility as the market continues to price in a heavy “war premium”.