The global oil market has been experiencing a significant upswing in recent years, with Brent crude prices reaching new highs in 2026. However, some analysts have raised concerns that we may be following a similar path to the 2022 Ukraine shock, which led to a sharp decline in oil prices. In this blog post, we will explore the risks and opportunities in the global oil market and assess whether we are indeed on the path to another energy shock.

In 2022, tensions between Russia and Ukraine led to a sharp decline in oil prices. The Brent crude price fell by over 30% from its peak, taking nearly a year to return to its January level. This event highlighted the potential risks associated with geopolitical tensions and their impact on the global oil market.

While the current upswing in oil prices is not necessarily comparable to the Ukraine shock, there are some similarities that warrant attention. Today, Brent crude prices have risen by over 31% since the start of 2026, which is a stronger run-up than in 2021. This could mean that the market may be more susceptible to downside risks if geopolitical tensions escalate.

Additionally, the starting point for oil prices today is higher than it was in 2021, which means that any downward movement could be more pronounced. This is known as the “heavier downside tail risk.” As JPMorgan Macro noted, a prolonged Strait closure could send oil sharply higher, potentially exceeding $130 per barrel (or over $200 in today’s dollars) without a full disruption.

While the risk of downside tails is significant, there is also potential for upside tail risk. A prolonged closure of the Strait of Hormuz could lead to a supply shock and drive oil prices higher. As JPMorgan Macro noted, Brent crude exceeded $130 per barrel in 2008 without a full disruption, highlighting the potential for significant price movements in the event of a supply shock.