Bank of America has lifted its average Brent crude oil price projection for the second half of 2026 to $95 per barrel, up from a previous estimate of $83, driven by escalating tensions in the Middle East and heightened risks to global oil supply from restricted passage through the Strait of Hormuz.

The bank estimates that the peak volume of oil shipments affected during a disruption of the Strait of Hormuz could reach approximately 14 million barrels per day, significantly exceeding the pre-conflict daily average of about 4 million to 8 million barrels. Iran largely sealed off the strait after a joint U.S.-Israeli strike in late February, severely impacting one of the world's most critical energy transit routes. Before the conflict, roughly one-fifth of global oil and liquefied natural gas shipments moved through this chokepoint.

While U.S.-Iran tensions have cooled in recent weeks and markets are watching for potential diplomatic breakthroughs during the United Nations General Assembly, the practical supply risks remain unresolved. There are indications that Iran could reopen the Strait of Hormuz within seven days in exchange for reduced U.S. military pressure, but no such arrangement has been finalized yet.

Meanwhile, regional risks are spreading to other vital shipping lanes. Clashes between Yemen's Houthi forces and Saudi-backed groups near the Bab el-Mandeb Strait, another key corridor for Gulf crude exports, are adding to concerns. With Hormuz constrained, Saudi Arabia has increasingly relied on alternative export routes, raising the strategic importance of both the Bab el-Mandeb and east-west oil pipelines.

Saudi Arabia's own overland transport capacity is also facing disruptions. Recent attacks have affected the country's critical east-west oil pipeline, limiting its ability to bypass maritime bottlenecks. However, regional crude flows have not come to a complete halt. Alternative shipping routes, convoy protection measures, and partial passage through the Strait of Hormuz continue to ease some supply pressure, with Saudi crude shipments via the strait showing signs of recovery.

Bank of America believes these measures can alleviate some supply constraints, but damaged infrastructure and regional instability will continue to restrict crude movements. If the disruptions persist into 2027, near-month Brent prices could see further significant upside potential.