• US WTI crude prices surged over 5% amidst escalating tensions in the Middle East.
• Analysts have sharply increased oil price forecasts, anticipating Brent to average $82.85 per barrel in 2026.
• Market concerns persist over supply disruptions, especially regarding the Strait of Hormuz.

US crude oil prices soared on Monday, with West Texas Intermediate (WTI) rising more than 5.4%, driven by escalating tensions in the Middle East that raised fresh concerns over potential supply disruptions. WTI briefly hit $105 a barrel as markets reacted to increased shipping risks in key regional routes and the broader implications of the Iranian conflict, according to aa.

Significantly, Brent crude also traded firmly above $110, illustrating persistent worries about the safety of crude flows from the Gulf. The International Monetary Fund indicated that the ongoing war is diminishing the economic outlook worldwide, further complicating supply dynamics in the oil market, as noted by Reuters.

Amidst these developments, analysts have adjusted their oil price forecasts upwards significantly. The latest Reuters poll indicated a projected average of $82.85 per barrel for Brent crude in 2026, marking an increase of about 30% from earlier estimates. This change represents the steepest annual forecast increase on record, reflecting the market's apprehension about potential long-term supply disruptions, particularly through the critical Strait of Hormuz, which is vital for global oil and LNG transit, according to India Times and Reuters.

The ongoing conflict has caused significant disruptions, and OPEC reported a drop of 7.3 million barrels per day in March compared to February. Even with signs of potential negotiations to conclude the conflict, concerns about the infrastructure damage and continuous maritime threats suggest that supply risks remain elevated, as emphasized by analysts who urge caution in predicting a quick recovery, according to India Times.