Global oil and gas price trajectories now hinge on the path the conflict involving Iran takes, according to a fresh assessment from UBS. The bank set out three potential outcomes that would produce markedly different market responses and price levels depending on the length of disruptions and any physical damage to energy infrastructure.
Markets showed high sensitivity to evolving signals. Crude oil had surged toward $120 per barrel on Monday amid concerns the fighting could cause sustained interruptions to Middle East supplies. Prices later slipped below $90 after U.S. President Donald Trump said the war in Iran was "very complete, pretty much," a comment that suggested to markets the engagement might be winding down.
UBS scenario 1 - Rapid de-escalation, limited disruption
In the first and least disruptive scenario, UBS assumes the conflict de-escalates quickly by mid-March, with no damage to critical oil infrastructure and shipping through the Strait of Hormuz returning to normal. Under that outcome, the bank expects Brent crude to average about $80 per barrel in March before easing into the mid-$70s thereafter.
European gas prices would also moderate. UBS forecasts TTF holding near 00/MWh initially and then moving toward the high-00s in the second quarter. Analysts led by Henri Patricot noted that "inventory drawdowns and oil on water can help manage the near-term shortfall," and that gas markets could rely on stored supplies to offset a temporary suspension of some Middle East LNG exports.
UBS scenario 2 - One-month shipping disruption
The bank's second scenario envisions disruptions to shipping through the Strait of Hormuz lasting roughly one month. UBS says this would tighten both oil and gas markets more materially as inventories decline faster and output from Gulf Cooperation Council producers is constrained.
Under this path, UBS expects oil prices to move higher in the near term. "We would expect oil prices to rise above $100/bbl in the second half of March, averaging $100/bbl in March and $78/bbl for 1Q26, before coming down to $90/bbl in 2Q26 as disruptions ease," the analysts wrote.
Gas markets would face increased stress as well, with TTF potentially rising toward 00/MWh by the end of March as LNG supply remains constrained and demand reduction measures become required. UBS warned that even if the disruptions later ease, "normalisation for both oil and gas could be delayed, with the impact stretching into 2027."
UBS scenario 3 - Prolonged disruption with infrastructure damage
The most severe scenario assumes interruptions lasting longer than a month combined with damage to major energy infrastructure. In this case, UBS sees Brent averaging around $110 per barrel in March and potentially climbing toward $150 or higher by the second quarter of 2026.
Such elevated prices, the analysts cautioned, would likely lead to a "notably reduced level of demand." Gas markets would tighten sharply as well, with TTF prices averaging about 00/MWh in March and rising toward 00/MWh in the second quarter.
UBS drew a parallel for the potential gas shock, saying that an LNG supply shortfall in this scenario could resemble the impact of Russia's gas cuts to Europe in 2022, when alternatives were limited and fuel switching options were scarce.
Market implications and near-term considerations
Across UBS's scenarios, the key variables driving outcomes are the duration of shipping disruptions through the Strait of Hormuz and whether critical energy infrastructure is damaged. Inventories, oil on water, and stored gas supplies act as buffers in milder outcomes, while a longer or more destructive conflict would accelerate inventory drawdowns and tighten global LNG flows, placing upward pressure on both oil and gas prices.
The bank's analysis highlights the range of plausible market paths over coming months and into 2026, underlining how geopolitical developments in the Middle East could rapidly shift price dynamics for both crude and European gas benchmarks.