UBS warns prolonged Hormuz crisis could send oil to $200

Oil could climb to $200 a barrel, or about CHF 162, if the Strait of Hormuz stays closed for several quarters. UBS economist Alessandro Bee issued the warning to Keystone-SDA as the US-Iran conflict continues to disrupt energy supplies through the strategic waterway.

Hormuz links the Persian Gulf with the Gulf of Oman and the wider global shipping system. Before the conflict, about one-fifth of the world's oil and liquefied natural gas supplies passed through the strait. A prolonged shutdown would remove a large volume of supply from international markets and leave importers competing for dwindling reserves.

Bee's base case remains less severe. He expects the market to recover gradually over coming quarters, with oil trading between $80 and $100 a barrel and continued volatility. The higher range, between $150 and $200, applies if the closure lasts long enough for reserves to run down and market panic to take hold.

For Switzerland, the risk would arrive through fuel, transport, heating and electricity costs. The country imports most of the energy it consumes, leaving households and companies exposed to global prices even when physical shortages do not appear at Swiss borders. Swissinfo published Bee's assessment on September 11, 2026, citing the Keystone-SDA news agency.

The difference between $100 and $200 oil depends on time, reserves and confidence. Bee said a short disruption could be absorbed as producers, traders and governments adjust shipments. Several quarters of closure would create a different market, with emergency stocks gradually depleted and buyers paying a premium for every available cargo.

That prospect would affect more than petrol prices. Oil feeds into road freight, aviation, chemicals, manufacturing and agriculture. Higher transport and production costs can pass through supply chains before they reach consumers at the pump. Businesses facing weaker demand and rising input costs could delay investment or reduce hiring.

Bee described the price range as a risk scenario, not UBS's central forecast. The bank expects a gradual recovery in oil markets, with prices between $80 and $100 a barrel. He said the market could panic if reserves ran out under a prolonged closure, pushing prices to $150 to $200.

The shock would also complicate central bank policy. Persistent energy inflation could keep consumer prices high while recession risks weaken economic activity. Investors have already pushed bond yields higher, Bee said, partly because of inflation and expectations of interest rate increases. He added that some investors may also be questioning the sustainability of public debt.

Switzerland has avoided fuel shortages, but higher energy prices are already shaping the winter outlook. A related Swissinfo report published on August 26, 2026, said the country faced increased concern over winter gas supplies six months into the US-Iran war.

Swiss households would feel a prolonged energy shock through petrol, diesel, heating and goods transported by road. Companies with energy intensive operations would face higher costs and could pass them on, reduce output or postpone expansion. The impact would vary by sector and canton, with manufacturing regions and transport businesses particularly exposed to fuel and power prices.

Switzerland's energy system offers some protection through hydroelectric production, diversified electricity sources and storage arrangements. Those buffers cannot fully insulate the country from global oil and gas markets. Switzerland is integrated with European energy networks and depends on international trade for much of its fuel.

The immediate policy challenge would involve balancing affordability, supply security and inflation control. Any support for households or businesses would also have to be weighed against pressure on public finances. Bee said bond markets were already experiencing difficult conditions, with higher yields reflecting inflation concerns, possible rate increases and questions about debt sustainability.

UBS still sees evidence that Switzerland can recover, despite the energy risk. Bee pointed to purchasing managers' indices that have stayed mostly above the 50 point growth threshold since March. The services PMI has also improved significantly, offering support for an economy that depends heavily on services, finance, trade and high value manufacturing.

Employment has provided another positive signal. Bee said he was encouraged by the employment trend after last year's slowdown. A resilient labour market could help households absorb higher costs, although a sustained rise in fuel and heating bills would reduce disposable income.

The external picture has also improved in UBS's assessment. Economic indicators in the eurozone, including Germany, have moved upwards in recent months. Bee also cited positive signs in the United States. Stronger demand in Switzerland's principal trading partners would support exporters if the energy crisis remains contained.

The outlook carries other risks. Bee cited unpredictable economic policy from US President Donald Trump, including recent tensions with Canada. He also identified artificial intelligence as a potential source of weakness if expected productivity gains fail to materialise, leading to significant investment cuts. Those risks could compound an oil shock by weakening confidence and investment at the same time as costs rise.

The decisive variable for Switzerland is whether the Hormuz disruption remains temporary or becomes a long supply crisis. Under UBS's base case, markets gradually adjust and oil prices remain within $80 to $100 a barrel. That path would still mean pressure on motorists, transport operators and energy intensive companies, but it would leave room for the Swiss economy to continue its recovery.

A closure lasting several quarters would create a much more serious test. Prices between $150 and $200 a barrel would raise the cost of moving people and goods across Europe, intensify inflation and squeeze household budgets. A global recession would weaken Swiss exports and tourism while adding pressure to the federal budget and social security systems.

Swiss companies will watch energy procurement, currency movements, European demand and interest rates closely. Households will see the effects most directly through mobility and heating costs. Public authorities will need reliable information on reserves, supply routes and winter demand as the conflict develops.

Bee's forecast leaves the outcome conditional. UBS expects recovery, yet the bank's warning sets a clear boundary for risk: the longer the world's energy system loses access to Hormuz, the more quickly a regional conflict can become a global economic shock.