SocGen benchmarked the Iran war to every crisis since 1956. Here's when oil prices return to normal.

By Nora Redmond

Societe Generale expects a "slow normalization" based on benchmarking today's energy shock against every major one that's happened in the Middle East since the Suez Canal's closure in 1956.

A history of energy shocks suggest oil prices won't return to normal anytime soon.

West Texas Intermediate prices (CL.1) (CLK26) are currently up 24% since when the U.S. and Israel first started striking Iran - notably lower than highs reached during the first week of April, but still a long above where they were before the war. Meanwhile, Brent crude (BRN00) (BRNM26) has risen by about 17% since the beginning of the conflict.

The Paris-headquartered bank has lifted its end of 2026 forecast for Brent crude by nearly 8% from $79 a barrel to $85 a barrel on the worsening conditions of the supply of oil. It expects full normalization to not occur until toward the end of the year.

Analysts led by Mike Haigh, managing director and global head of commodities research, wrote on Monday that since the U.S.'s blockade of the Strait of Hormuz began, non-Iranian shipments from the Persian Gulf have stayed mainly flat while Iranian exports, which were at about 1.7 million to 2 million barrels per day, have plummeted to almost zero - representing the largest supply shock in the modern oil market on record.

"Even so, this revised level may still underestimate both the difficulty and duration of normalization, particularly given the scale of shut-ins and the constraints around shipping, insurance, port damage, and debris clearance," they said.

The analysts are expecting a "slow normalization" based on benchmarking today's energy shock against every major one that's taken place in the Middle East since the closure of the Suez Canal in 1956.

"While oil intensity relative to GDP has fallen materially over time-implying lower macro sensitivity-all major episodes share a common pattern: supply disruptions unwind slowly," they wrote, adding that in the past 70 years, oil shocks have taken an average of eight months to normalize.

The analysts estimated that demand for oil has dropped by about 3% so far, with the likelihood of further losses if the normalization process is delayed. They noted that March and April's average price spike of 42% above pre-conflict levels is significantly lower than during the administered-price era of the 1970s, when it hit as high as 134% in 1973.

"Consistent with both logistics and historical precedent, our working assumption remains that full normalization occurs only toward the end of 2026, despite the recent easing in headline prices," the analysts wrote.

-Nora Redmond

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04-20-26 0728ET