Wood Mackenzie: Hormuz Closure Could Send Oil to $200

Source: gCaptain / Wood Mackenzie Horizons Report — May 21, 2026
Author: Peter Martin (Head of Economics), Massimo Di Odoardo (VP Gas & LNG Research)

Current Disruption Scale

  • 11+ mb/d Gulf crude and condensate production curtailed
  • 80+ mt/yr LNG supply inaccessible (~20% of global supply)

Three Scenarios

Scenario 1: Quick Peace

  • Strait reopens by June
  • Global economy returns to pre-war trajectory by Q4
  • Brent: ~$80/bbl by year-end, ~$65 in 2027
  • Markets return to oversupply

Scenario 2: Summer Settlement

  • Strait largely closed until September
  • Oil and LNG shortages persist through Q3
  • Brent: $120-150/bbl range
  • Shallow global recession in H2 2026

Scenario 3: Extended Disruption

  • Strait remains largely closed through year-end
  • Brent approaches $200/bbl by end-2026
  • Despite global oil demand falling 6 mb/d YoY in H2
  • Diesel and jet fuel: $300/bbl in major refining centers
  • Global GDP contracts 0.4% in 2026 (third global recession this century)
  • Middle East GDP: -10.7%
  • EU GDP: -1.5%
  • US growth: <1% in both 2026 and 2027

LNG Dimension (Unique to WoodMac)

  • Even in quick-peace case, LNG markets remain tight through summer 2027
  • Gulf export facilities need time to recover; new supply projects face delays
  • In extended disruption:
  • Some of Gulf's 85 mt/yr existing LNG capacity could be permanently lost
  • ~75 mt/yr of projects under construction could face multi-year delays
  • Would accelerate diversification away from imported LNG
  • Supports coal resilience and faster growth in renewables/electrification

Significance

Wood Mackenzie's three-scenario framework provides the most structured analytical lens for the Hormuz crisis. The $200 worst-case is grounded in supply/demand math (6 mb/d demand destruction still insufficient to offset supply loss). The LNG dimension is unique — no other source has quantified the 80 mt/yr LNG gap and its structural implications for global energy transition.

The permanent LNG capacity loss scenario is a structural long-term concern that extends beyond the immediate crisis.