Brent Crude Predicted to Hit US$100 per Barrel by Year-End Amid Global Supply Risks
Hong Leong Investment Bank Bhd (HLIB) expects Brent crude to remain elevated in the fourth quarter of 2026 due to widening global supply deficits and escalating risks to oil flows through key Middle Eastern chokepoints. According to HLIB, Brent could reach US$95 to US$100 per barrel by year-end, with the bank raising its 2026 price assumption to US$90 per barrel from US$80 previously.
The escalation of tensions in the Middle East has raised concerns over simultaneous disruptions at the Strait of Hormuz and Bab el-Mandeb. HLIB notes that some of these upside risks are materializing, particularly severe disruption to Strait of Hormuz traffic, rising threats in Bab el-Mandeb, and attacks on regional energy infrastructure.
HLIB cites Saudi Arabia's East-West Pipeline as a key alternative route for bypassing the Strait of Hormuz, which was temporarily shut following drone attacks. The pipeline has a total capacity of seven million barrels per day, with five million bpd available for exports and two million bpd supplying domestic refineries.
HLIB also points to signs of a recovery in China's crude imports as another upside risk to Brent prices. China's crude imports rose 22% month-on-month in July and a further six percent in August to 37.9 million tonnes, despite weak traffic through the Strait of Hormuz and softer domestic oil demand.