Four Weeks of War: What Extended Conflict Would Mean for Energy Prices

With military authorities suggesting that the current conflict could last for four or more weeks, energy market analysts on Monday were running through the scenarios for what an extended period of conflict would mean for global energy prices. The conclusion was sobering: a sustained conflict of that duration, with the Strait of Hormuz remaining effectively closed, could push oil prices to levels not seen in years and cause significant economic disruption.
In the short term — the first one to two weeks of the conflict — the impacts already seen on Monday are likely to persist. Gas prices will remain elevated at the 40% higher levels reached in Monday’s trading session. Oil prices, after the initial surge to $82 a barrel, are likely to settle at elevated levels in the $75-$85 range as the market balances the supply shock against the possibility of a relatively quick resolution. Strategic petroleum reserve releases may be deployed to provide some price relief.
In the medium term — two to four weeks of conflict — the picture darkens considerably. Strategic petroleum reserves begin to run down, reducing the buffer available for future shocks. Alternative LNG cargoes from Australia, the United States, and other producers have been redirected where possible, but total supply remains significantly below normal. Oil prices, facing sustained supply disruption with limited reserves buffer, begin to approach $90 or higher. Consumer price pressures build across energy-importing nations.
In the scenario of a conflict lasting four weeks or more — particularly if the Strait of Hormuz remains effectively closed throughout — analysts warned that oil could comfortably exceed $100 a barrel. Gas prices could remain at or above their current elevated levels, with households and businesses facing significantly higher energy costs. The economic impact would be felt globally, adding to inflationary pressures, dampening growth, and potentially tipping some vulnerable economies into recession.
The wildcard in all these scenarios is diplomacy. Even during intense military conflicts, diplomatic channels can sometimes produce unexpected breakthroughs that allow for partial de-escalation, the reopening of shipping lanes, or the resumption of energy production. The energy market’s ultimate trajectory depends not just on the military situation on the ground, but on the diplomatic moves being made behind the scenes — moves that are, by their nature, impossible for markets to observe or predict in real time.