Tsvetana Paraskova

Thu, April 16, 2026 at 8:00 PM EDT 5 min read

Oil prices have held steady below $100 per barrel since the U.S. on Monday initiated a naval blockade to deter Iran-linked ships from passing through the Strait of Hormuz.

The three days of calmer oil futures markets so far this week aren’t expected to last long amid the volatile geopolitical situation at the world’s most vital oil shipping lane.

The price of oil has the potential to either surge to new highs or slump to pre-war levels, depending on the U.S.-Iran talks, but most of all—on the status of navigability of the Strait of Hormuz and how fast some semblance of normal traffic could eventually resume.

For now, despite the U.S. blockade and Central Command’s claim that the blockade is a major success, traffic of non-Iranian vessels hasn’t been restored, while some Iran-flagged ships have been observed by vessel-tracking providers to have successfully breached the blockade.

Globally, physical supply remains severely constrained, as evidenced by $150 per barrel prices for some non-Middle Eastern crudes that refiners are willing to pay for. The price of physical crude for immediate delivery has soared amid the supply constraints and is about $40 per barrel more expensive than the futures.

But the futures market moves on headlines and sentiment, and right now it pins its hopes on the prospect of renewed U.S.-Iran talks, possibly as soon as this week.

Related: India’s Central Bank Tells Oil Refiners To Stop Buying Dollars On Spot Market

For analysts, forecasting oil prices has become even more guesswork than ever before, as uncertainties and conflicting messages from the Trump Administration have reduced visibility on price projections to near zero.

Goldman Sachs, for example, this week kept its average Brent and WTI forecasts for 2026, at $83 and $78 per barrel, respectively. The investment bank, however, flagged both upside and downside risks to these projections.

Upside vs Downside Risks

Low oil flow volumes through the Strait of Hormuz pose the biggest upside risk, according to a Goldman note cited by Reuters. The Wall Street bank’s analysts estimated that oil flows are only 10% of pre-war levels at just 2.1 million barrels per day (bpd), and no LNG has yet passed the Strait since the war began on February 28.

“The ceasefire has diminished the risk premium and the probability of very lengthy and large supply losses,” Daan Struyven, Goldman Sachs co-head of global commodities research, told CNBC’s ‘Squawk on the Street’ program on Wednesday.