Analysts and major banks are increasingly divided over how to forecast oil prices, but for different reasons. In one case, JPMorgan effectively stepped away from forecasting oil prices because of the difficulty in modeling future prices amid what is becoming a prolonged conflict with Iran. More critically, the conflict’s endgame, and how it may be achieved, remains uncertain.

What is clear, however, is that the conflict is creating significant supply disruptions. Daily vessel traffic through the Strait of Hormuz has fallen from roughly 125 ships to fewer than 20 ships per day, and a drone strike on Saudi Arabia’s East-West pipeline has added further supply uncertainty.

Other financial institutions have not abandoned forecasting altogether, but their actions tell a similar story. Goldman Sachs, Bank of America, and HSBC have all sharply raised their oil price outlooks in recent weeks, although their views on where prices may ultimately settle remain divergent. HSBC’s fourth-quarter 2026 Brent forecast jumped to $95, a $20 increase, while Bank of America sees a scenario in which Brent could rise to $120 if the conflict persists.

This is not being viewed as a temporary spike. Instead, it is increasingly seen as a structural “new normal,” in which the Strait is neither fully closed nor fully open. This has created expectations of prolonged supply disruptions with little expectation of a return to pre-conflict market conditions.

It is concerning that analysts are no longer simply disagreeing about where oil prices are headed. Instead, they are losing confidence in their ability to forecast prices at all in the current environment. The conflict with Iran has lasted well beyond the expected timeframe, and as it remains unresolved, uncertainty continues to grow.

This uncertainty is detrimental to our clients because it makes it more difficult to confidently invest in additional drilling and production initiatives. One concern is that today’s high prices could lead to demand destruction, causing prices to decline sharply. As we are seeing, this uncertainty is contributing to a slowdown in activity in the Gulf of America (GOA) despite high oil prices. In turn, continued uncertainty could have a knock-on effect on the offshore support vessel market.