Rising oil prices and shifting demand may hasten the end of the oil era

Crude prices have surged past $100 a barrel, prompting major banks and the US Energy Information Administration to raise their 2027 outlooks amid ongoing tanker attacks in the Strait of Hormuz. S&P Global Energy now doubts that Middle Eastern output will rebound to pre-war levels by the end of 2027. Meanwhile, demand has slipped roughly 5 million barrels per day, driven by higher prices, Ukrainian strikes on Russian refineries and reduced runs at Gulf plants.

Analysts note that the proliferation of alternative energy sources has lowered consumers' willingness to absorb price spikes, meaning a smaller supply shortfall could curb demand. JP Morgan predicts demand next year could hit its lowest level since 2019 if the semi-closure persists. The combined supply constraints and waning demand may push the market toward a permanent decline rather than a short-term rally.