UBS reports potential oil and gas price volatility due to Iran tensions

The financial services firm UBS has outlined three scenarios for global oil and gas prices in response to rising geopolitical tensions involving Iran. The analysis centers on the potential for disruptions in the Strait of Hormuz, a critical transit point for global energy supplies. In the most optimistic scenario, rapid de-escalation would allow Brent crude prices to return to the mid-70 dollar range. Conversely, in an extreme scenario, prices could surge to 150 dollars per barrel or higher during the second quarter. Furthermore, European natural gas prices are projected to fluctuate between 50 and 80 euros. UBS warns that if infrastructure damage occurs or if transit disruptions are prolonged, the market shock could persist throughout 2026 and beyond. The firm identifies oil as the most immediate indicator of geopolitical risk. Currently, the primary assumption is that the crisis will de-escalate within March, provided that critical infrastructure remains undamaged.