06:01 AM EDT, 03/25/2026 (MT Newswires) -- There is still room for prices to rise in the event of further escalation in the Middle East war, but this would require a very prolonged supply disruption that could no longer be covered by reserves, Commerzbank said in a Tuesday note.

Commerzbank assumes a 15% supply shortfall for three months as about 20% of global oil supply flows through the Strait of Hormuz, with nearly five percentage points offset by alternative routes.

According to the bank's model estimates, the oil price would rise significantly further if supply remains constrained until around the middle of the year, with prices potentially reaching up to US$135/barrel.

However, the current supply gap can be covered by releasing oil reserves, and demand reacts to the energy price shock. Prolonged elevated prices would place a significant strain on the global economy and lead to a decline in oil demand, Commerzbank said.

Rising interest rate expectations driven by fears of inflationary consequences are likely already weighing on demand prospects and dampening the oil price. The resulting economic slowdown acts as an automatic price cap, which means extremely high prices appear unlikely, at least on a sustained basis, the bank noted.