Oil Prices in 2026 Are Being Set by Two Crises at Once — and Egypt Sits Between Them

Oil forecasts for late 2026 cluster in a fairly narrow band — J.P. Morgan projects Brent crude averaging around $86 a barrel in the third quarter, sliding to about $80 in the fourth and $78 by year-end, while the U.S. Energy Information Administration's own estimate sits close to $85 for Q3. Those numbers look almost calm on their own. What's actually setting them, underneath the calm, is two separate Middle East crises running at the same time — and Egypt happens to sit at the geographic hinge between both.

The Actual Shock Behind the Number

The larger of the two is the 2026 Strait of Hormuz crisis. After U.S. and Israeli strikes on Iran began on February 28, 2026, Iranian forces declared the Strait "closed" days later and began attacking commercial shipping attempting to transit it — a waterway barely 33 kilometres wide at its narrowest point, through which roughly a fifth of the world's oil, plus significant liquefied natural gas volumes, normally passes. The International Energy Agency characterized the resulting disruption as the largest in the history of the global oil market. A ceasefire in April broke down by July, and disruptions of roughly 0.6 million barrels per day are expected to persist through the rest of 2026, with most regional production only expected to return to pre-conflict levels in early 2027.

Egypt's Odd Position, Caught Between Two Chokepoints

Here's what makes 2026 genuinely unusual: the Suez Canal, Egypt's own great maritime chokepoint, doesn't touch the Strait of Hormuz at all — it's an entirely separate stretch of geography, connecting the Red Sea to the Mediterranean rather than the Persian Gulf to the Arabian Sea. In theory, that should make Suez an obvious, unaffected alternative route for cargo trying to avoid Hormuz-related risk. In practice, the canal has been fighting its own, unrelated crisis for nearly three years: Houthi attacks on Red Sea shipping, ongoing since late 2023, have pushed most container traffic to reroute around the Cape of Good Hope rather than risk the Bab el-Mandeb Strait leading into the Red Sea and Suez. Only in the past few weeks, as of early September 2026, has Suez traffic shown genuine signs of recovery, with weekly transits reaching levels not seen since the start of 2024.

That leaves Egypt holding a strange, dual position in this specific story: geographically insulated from the crisis dominating the headlines, while simultaneously managing a separate, quieter crisis of its own that's kept its own canal from fully benefiting from being the obvious safe alternative.

What This Means for Prices Going Forward

• OPEC+ supply discipline and lingering Hormuz-related disruption are pushing prices up
• Softening demand forecasts from both OPEC and the IEA are pulling prices down
• A still-fragile Red Sea recovery means shipping costs and insurance premiums remain unusually sensitive to headlines out of two separate Middle East waterways at once, not one

That combination is why most 2026 forecasts land in a band rather than a single confident number — anywhere from the high $70s to the high $80s a barrel through year-end, with the range itself being the honest answer. It's a rare moment where both of the Middle East's defining maritime chokepoints are live risk factors simultaneously, and Egypt's own waterway sits close enough to feel the effects of both without fully controlling either.

Two of the world's great maritime chokepoints, both under strain in the same year, on opposite sides of the same country — it's a genuinely unusual moment in the region's economic history, and one the next few months of headlines are likely to keep testing.