UBS outlines three distinct scenarios for the trajectory of oil and natural gas prices amid renewed tensions with Iran, focusing primarily on the duration and scale of disruptions in the Strait of Hormuz, a critical passage for global energy flows.
In its analysis, the Swiss bank notes that the range of possible developments is unusually wide: from a relatively quick de-escalation that would allow Brent crude to return to the mid-$70s per barrel, to a far more extreme scenario where prices could climb toward $150 or even higher during the second quarter.
UBS stresses that oil remains the most immediate indicator of geopolitical risk. As long as the conflict remains contained, the market could quickly return to lower levels. However, if disruptions in the Strait of Hormuz persist or critical energy infrastructure is hit, the global market could face a shock extending beyond March and potentially affecting all of 2026 and possibly beyond.
The base scenario: rapid de-escalation
In UBS’s base scenario, the crisis de-escalates quickly within the coming days of March. This assumes there will be no serious damage to key oil infrastructure, such as oil fields or export terminals, and that flows through the Strait of Hormuz will resume.
Under these conditions, the bank expects Brent crude to average around $80 per barrel in March before falling back toward the mid-$70s.
For European natural gas, the TTF gas benchmark is expected to remain close to €50 per MWh before declining toward €30 in the second quarter.
UBS forecasts show Brent at $71 per barrel in the first quarter, $74 in the second quarter, and $72 on average for 2026. The TTF benchmark is estimated at €41.37 per MWh in the first quarter, €34.57 in the second, and €34.99 on average for 2026.
The second scenario: prolonged disruption
The second scenario is significantly more challenging for markets. UBS considers the possibility that disruptions in the Strait of Hormuz could last about one month.
In this case, both oil and gas markets would tighten noticeably as stockpiles are drawn down more quickly and supply from Gulf countries remains constrained for longer.
The bank estimates that Brent prices could rise above $100 per barrel in the second half of March, averaging $100 during the month, before easing toward $90 in the second quarter as conditions gradually stabilize.
Forecast tables place Brent at $78 per barrel in the first quarter, $90 in the second quarter, and $82 for all of 2026.
For natural gas, UBS expects the TTF benchmark to rise toward €80 per MWh by the end of March, averaging €65 during the month. Quarterly projections place the index at €46 per MWh in the first quarter, €50 in the second, and €45.25 for the year overall.
The bank also notes that normalization in oil and gas markets could be delayed, potentially affecting price dynamics even into 2027.
The “worst-case” scenario
The third and most aggressive scenario involves prolonged disruptions lasting longer than a month, combined with damage to major oil and gas infrastructure.
In such a case, UBS warns that the consequences for global energy markets would be far more severe, potentially pushing oil prices toward $150 per barrel or higher and triggering a broader and longer-lasting shock across global energy supply chains.
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