Bernstein analysts warn that escalating U.S.-Israel tensions with Iran could tighten oil markets dramatically, with a potential Strait of Hormuz closure adding a $5-$10 per barrel risk premium immediately. The analysts, led by Irene Himona, model three scenarios based on disruption duration, with the worst case projecting Brent crude above $110 per barrel.

With 20% of global oil and LNG trade passing through the strategic chokepoint, even a one to three-month closure would flip the market from a 2.8 million barrel per day surplus to a 1.8 mb/d deficit in 2026. Bernstein's base case of $65 Brent would jump to roughly $80, while European gas benchmark TTF would rise from $10 to $15 per mmBTU.

A six-month closure represents the most severe outcome, creating a 5.6 mb/d deficit that Bernstein says approaches recessionary territory. With OPEC spare capacity at only 3.0 mb/d, the analysts warn of potentially grave consequences for the global economy. Pipeline alternatives from Saudi Arabia and the UAE could bypass less than 15% of Hormuz flows, underscoring the limited physical alternatives available.