Navigating Global Oil Market 2026 Risk Scenarios

Valuation Outlook

February 20, 2026

Kroll Economics Insights: Quantifying the Key Risks and Opportunities in Global Oil Markets

Forward‑looking intelligence on how global volatility is shaping oil, inflation and the 2026 economic outlook.

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The global oil market enters 2026 during heightened uncertainty, driven primarily by escalating geopolitical tensions across major producer states. Recent events - including unrest in Iran and the capture of Venezuelan President Nicolas Maduro - have added disruption risk and increased volatility in global supply chains.

Our Kroll Economics Team has analyzed the current political and market environment to model two plausible near-term scenarios. The team uses proprietary forecasting tools and insights from global experts to guide the analysis. It shows how shifting risks - from possible Middle East supply disruptions to a rebound in Venezuelan production - could influence short-term oil prices, inflation and overall economic stability.

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  • Current market conditions
  • Scenario modelling results
  • Regional and sector-level implications
  • Strategic considerations for 2026

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Market Snapshot

Surplus Conditions, Elevated Risk

Despite a surplus, the market remains acutely exposed to geopolitical volatility. Brent crude is forecast to average $61 per barrel (bbl) in 2026, below its long‑term, inflation-adjusted trend, as OPEC+ gradually unwinds voluntary cuts and non-OPEC supply continues to expand.

Key Drivers

  • Instability in Iran and broader regional tensions
  • Political transition and production uncertainty in Venezuela
  • OPEC+ output adjustment path
  • Rising inventories that limit upward price momentum

Kroll Economics modeling assesses how today’s risk environment could evolve under two distinct near‑term scenarios, quantifying their impact on output, prices and GDP.

Scenario 1 - Closure of the Strait of Hormuz

A closure of the world’s most critical oil chokepoint would trigger major global reverberations.

Modeled Impact

  • Middle East Output: Down approx. 65%
  • Global Prices: Up approx. 96%
  • Global GDP: Down approx. up to 2.4%
  • Middle East GDP: Down approx. 36%

Knock‑on Effects

  • Higher transport and manufacturing costs
  • Rapid inflation spillover into major economies
  • Shipping rerouting, insurance surcharges and supply chain delays

Scenario 2 - Venezuelan Oil Revival

Greater political stability and new investment could restore growth to Venezuela’s long-declining oil sector.

Modeled Impact

  • Output: Up 150% by 2030 (to 2.5 mbpd)
  • Global Prices: Down approx. 3.5%
  • Global GDP: Up approx. 0.06%
  • Venezuela GDP: Up approx. 24%

Political and Market Considerations

  • Shifts in regional political alignment
  • Potential U.S. tariff or sanctions policy adjustments
  • Rerouting of crude exports and supply chain rebalancing

How We Can Help

The Kroll Economics Team helps translate uncertainty into decision-ready insights. Our modeling helps clients stress‑test budgets, investment plans, supply-chain exposure and risk strategies against realistic geopolitical pathways.

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