What truly drives oil prices is not simply when the conflict ends, but when the market crosses an irreversible tipping point. After nearly four weeks of tensions involving Iran, the oil market has been operating under a typical “time-pricing” dynamic. Releases from strategic petroleum reserves have delayed the full impact of supply shortages but have not erased the underlying supply gap. Disruptions to tanker traffic and slow progress in restoring production capacity have continued to push inventory pressures further into the future. Once the market passes the key mid-April threshold, the pricing mechanism will shift from buffered volatility to gap-driven repricing.

        More importantly, the structure of the geopolitical game itself is changing. The conflict is no longer following a pattern of escalation followed by de-escalation; instead, it has evolved into a waiting game designed to test the market’s breaking point. Whoever can hold out until the supply-demand imbalance is fully priced in will gain decisive negotiating leverage. This means that even if the conflict ends in the near term, oil prices will struggle to return to previous ranges. The supply losses already incurred are reshaping the global oil balance for the foreseeable future.

        In an earlier analysis published on March 9, we laid out how different timelines for the resumption of tanker traffic would shape annual average Brent prices, with supply loss estimates accounting for the time required to restore production capacity. If shipping resumed the next day, Brent would average in the high $70s to low $80s. A return by March 15 would push prices to the mid-to-high $80s. By March 22, levels would reach the low $90s, and by March 29, the mid-to-high $90s. Had operations still not normalized by March 29, the market would have faced an extreme scenario requiring forced demand destruction and sharply elevated prices.

        Shortly after that publication, the International Energy Agency announced a coordinated release of 400 million barrels from global strategic reserves. While this move eased some near-term supply anxiety, it only bought time rather than solving the core problem. As we noted at the time, traders would hold off on aggressive buying until the buffer was exhausted, but prices would still grind higher as long as shipping remained disrupted. A rapid de-escalation, by contrast, could send prices sharply lower. Had a peace deal arrived before March 15, global inventories would have posted a net build, potentially pulling Brent back toward the mid-$70s. Conversely, a prolonged disruption through the end of March would result in a net inventory draw, with the gap widening by roughly 80 million barrels each additional week.

        As events unfolded, the market has effectively entered the March 29 scenario we originally outlined. Based on the latest on-the-ground facts, combined production shutdowns across Saudi Arabia, the UAE, Kuwait, Iraq, and Bahrain have reached 10.98 million barrels per day. Saudi Arabia has fully utilized its cross-country pipeline to export around 4 million barrels per day via the Red Sea, while the UAE has maxed out its Habshan–Fujairah pipeline capacity at 1.8 million barrels per day. All tanker traffic through the Strait of Hormuz remains fully interrupted. Critically, even if the conflict ended immediately, production and shipping would take months to fully recover.、

        Against this backdrop, we outline three plausible scenarios for how the conflict may resolve, with the 400 million-barrel SPR release already incorporated into the outlook.

        In the first scenario, where the conflict ends by the end of the week and shipping resumes promptly, global inventories would face a net draw of 50 million barrels. Brent would briefly dip toward $80 before settling into an annual average in the mid-to-high $80s.

        In the second scenario, with a resolution in mid-April, the inventory deficit would widen to 210 million barrels. Brent would find a near-term floor near $90, with an annual average in the mid-to-high $90s.

        In the third scenario, where the conflict lasts through the end of April, the inventory shortfall would balloon to 370 million barrels. Brent would spike into the $110 range, with an annual average between $110 and $120.

        Mid-April represents a clear and widely recognized inflection point. Oil prices operate on marginal pricing, and so far, the market has remained relatively calm under the assumption that supply remains just sufficient. Statements from the Trump administration, relaxed sanctions on Iranian and Russian oil, and strategic reserve releases have all helped cap price gains. But once this threshold is crossed, these restraining factors will no longer hold.

        The depletion of in-transit crude has not yet fully hit onshore inventories, but by mid-April, that lag will end. If the conflict remains unresolved by then, the IEA will likely be forced to coordinate another release of roughly 400 million barrels. Without additional intervention, prices could surge into demand-destruction territory above $200.

       Some forecasters, including Energy Aspect, have issued even more aggressive supply loss estimates, projecting a total market shortfall of around 930 million barrels, including 340 million from May to December alone. These projections account for the reality that countries like Iraq and Kuwait may need three to four months to restore production, suggesting our earlier estimates may have been overly conservative. Goldman Sachs has similarly concluded that the longer the conflict drags on, the longer elevated prices will persist. Its 10-week extension scenario aligns closely with our own analysis.

         At the heart of the situation is a non-negotiable tipping point. Once crossed, the market cannot easily return to previous conditions. Investors should prepare for a structural upward shift in oil prices. Even an immediate end to hostilities would leave lasting damage to the global supply-demand balance.

        To date, we have avoided predicting an exact end date for the conflict, partly due to the inherent uncertainty of geopolitical events. However, this episode differs sharply from past conflicts. The traditional playbook of escalation followed by de-escalation is absent. Retaliatory strikes occur without warning, and Iran’s actions have expanded beyond Israel to include Gulf states.

        With nearly four weeks of disruption already passed, the odds of a near-term deal appear to diminish each day. Iran understands the oil market’s timing and has little incentive to settle before the tipping point, as doing so would surrender its tactical advantage. The Strait of Hormuz card has now been played, limiting future leverage. For Gulf nations, any outcome that leaves the current Iranian regime intact would leave them vulnerable to repeated energy disruptions.

        In this game of patience, the initiative does not lie with the United States, but with Iran. By holding on for roughly three more weeks, Iran can wait for market fractures to emerge and test U.S. economic resilience. These conclusions reflect fundamental market analysis rather than geopolitical prophecy, and certainty remains limited. What is clear, however, is that mid-April will be a make-or-break moment for the global oil market.