Around 1.1 billion barrels of oil supply will be "erased" from global markets in 2026, and the structural consequences of the ongoing conflict in the Middle East, such as damaged infrastructure and depleted strategic reserves, are likely to persist for years, Jarden said in a Thursday note.

It has already erased around 400 million barrels from global markets, with losses running at around 13 million barrels per day. Jarden raised its oil and liquefied natural gas (LNG) price forecasts over the risk of further escalation in the Middle East conflict after peace talks broke down and US President Donald Trump announced a US naval blockade of the Strait of Hormuz.

It forecasts Brent crude oil to average $92 per barrel in 2026, $90 per barrel in 2027, and $85 per barrel from 2028, assuming the Strait of Hormuz opens for shipment by the end of April.

Fuel, petrochemical, and fertilizer shortages are building. Global oil supply has fallen around 12% and LNG supply around 20%, with demand destruction appearing increasingly inevitable.

The investment firm assigned overweight ratings to both Woodside Energy Group (ASX:WDS) and Santos (ASX:STO) and set a price target of AU$37 per share for Woodside and AU$8.85 per share for Santos.