Britain Anticipates Sustained Challenges in Global Oil Markets Until 2028

The British government has raised its oil price forecasts, indicating that crude may maintain elevated levels until 2028, even with a potential US-Iran peace agreement. This revised outlook stems from an assessment that energy flows from the Arabian Gulf will take longer to recover. A recent study warns of more sustained pressure on energy prices and a worsening global economic outlook compared to previous estimates. Initially, the British government anticipated six months of energy market disruption post-conflict, expecting a swift recovery from the Gulf. However, it now believes restoring oil supplies from the region could take up to 14 months. According to the study, in the optimal scenario involving a US-Iran agreement this year, crude oil prices might remain in a range between $100 and $150 per barrel until year-end due to the slow recovery of Gulf flows, and would stabilize near $100 per barrel until 2028 in this scenario. In the most pessimistic scenario—a resumption of conflict damaging regional energy infrastructure and delaying recovery for years—oil prices could initially surge to $210 per barrel before settling around $150 until 2028.