Strait of Hormuz closure shakes Europe: Oil price forecast soars 46%

econews. Just months ago, before the outbreak of hostilities involving Iran, the Commission had predicted a modest $62.4 per barrel for 2026 and $63 for 2027. Those figures have now been torn up. “The energy shock resulting from the war in the West Asia and the de facto closure of the Strait of Hormuz is the single most important driver of this upward revision,” the report states explicitly.

According to the Commission’s analysis, following U.S. and Israeli strikes on Iran on February 28, 2026, crude prices surged roughly 65% by April 29. The virtual shutdown of the Strait – a chokepoint through which about one-fifth of global oil passes – has already slashed maritime oil flows by 15% and liquefied natural gas (LNG) shipments by 20%. Brussels now warns that oil and gas prices could remain 20% above pre-war levels for the foreseeable future.

In a particularly grim passage, the report cautions that if the Strait disruption and fighting persist, “the worst-case scenario has not yet materialized.” Energy prices may not peak until late 2026, and the European economy might fail to recover through 2027. The knock-on effects are already visible: eurozone growth for 2026 has been cut to 0.9% (down from 1.2%), while inflation in the eurozone has been revised up to 3.0% (from 1.9%) and to 3.1% across the entire EU.

Analysts note that the 46% forecast hike underscores how deeply the crisis is reshaping Western economic calculations. With Iran exercising effective control over the strategic waterway, global energy markets are bracing for prolonged turbulence. One Brussels-based energy economist, speaking on condition of anonymity, said: “We have not seen a supply-side shock of this magnitude since the 1970s oil embargo.”

The Commission’s spring report leaves little room for optimism, describing the Strait of Hormuz closure as the biggest energy shock to Europe since the invasion of Ukraine. For now, EU member states are scrambling to secure alternative supplies, but the report makes clear that no short-term fix can replace the lost throughput from the world’s most vital oil artery.