Will WTI crude average above $85/bbl for Q3 2026?
The Condition
Strait of Hormuz sustained disruption (>50% traffic reduction for 14+ days) before June 30, 2026
Our Ensemble Estimates
Given Hormuz sustained disruption: Will WTI crude average above $85/bbl for Q3 2026?
Given Hormuz reopens: Will WTI crude average above $85/bbl for Q3 2026?
Causal Effect
Hormuz disruption worth ~59pp to WTI >$85 probability (92% if disrupted vs 33% if not). Delta narrowed slightly from 60pp as the structural floor under IF FALSE rose (depleted SPR, permanent vulnerability premium). Under IF TRUE, the question has shifted from whether prices reach $85 to how far above — the emergency toolkit is exhausted and offsets are formally INSUFFICIENT.
Why This Matters
Tests whether a sustained Hormuz disruption keeps the geopolitical risk premium elevated through Q3 2026. With WTI at ~$72.57 pre-shock and an estimated $17-22/bbl geopolitical premium, the severe scenario (Brent $100-130) implies WTI well above $85. The Hormuz paradox — OPEC+ spare capacity trapped behind the disrupted chokepoint — limits deliverable offsets to 1.5-2.5 mbpd against a 3-5 mbpd base case disruption, supporting sustained elevated pricing. Key offset: SPR release (415M barrels available) could moderate prices if politically authorized.
Condition Resolved
The condition was TRUE. The IF TRUE branch is now the active prediction.
Resolution Criteria
EIA weekly WTI spot price data for July 1 through September 30, 2026 averages above $85.00 per barrel
Source Analysis
Oil carries an estimated $17-22/bbl geopolitical premium above $60-64 fundamental equilibrium; premium approaching CRISIS territory if Hormuz disruption persists beyond 72 hours