Oil prices would have to climb significantly above current levels before triggering a meaningful drop in demand, according to analysis from Bernstein.
Analyst Irene Himona said that “in today’s money we would need $155/bbl as the FY26 annual average, to reach the same 5.2% oil burden” experienced in 2007, a level historically associated with high prices beginning to reduce consumption.
The note describes the recent surge in Brent crude as part of an ongoing “war-price discovery” phase following the outbreak of the conflict involving Iran.
Brent, which had been trading around $80–$85 in the early days of the conflict, “rapidly spiked to $94/bbl” before opening at $110 on Monday and then retreating to about $100.
Himona linked the price swings to exceptional operational risks, pointing out that the Strait of Hormuz was shut for the first time in history. The disruption quickly led to upstream production shutdowns in Iraq, the United Arab Emirates and Saudi Arabia as storage capacity neared its limits.
Bernstein estimates that the loss of “20% of global oil (and LNG) for a prolonged period” would lift the average Brent price in 2026 to above $90 per barrel if the disruption lasted three months, and above $110 per barrel if it continued for six months, with potential spikes far above those averages.
The escalation of direct strikes on energy infrastructure — including Saudi Arabia’s 550,000-barrel-per-day Ras Tanura refinery and Qatar’s LNG facilities — signals what Bernstein describes as a “true crisis mode,” comparable only to the destruction of Kuwait’s oil industry in 1991.
Despite the upheaval, Himona expects energy companies to keep first-quarter shareholder distributions largely unchanged, with surplus cash likely to be used to reduce debt.
However, she cautioned that if the conflict drags on, markets could begin pricing in an economic slowdown or recession, which would cause the sector to trade more closely in line with the broader equity market.