Mid-$80s Oil Prices Predicted as Iran Conflict Continues

Oxford Economics has revised its forecast for oil prices due to concerns over a prolonged and intermittent conflict between the United States and Iran.

The firm no longer expects a full reopening of the Strait of Hormuz during the third quarter, instead predicting a volatile market with Brent crude averaging in the mid-$80s per barrel through 2026.

Bridget Paine, head of oil and gas forecasting at Oxford Economics, said prices are expected to trend lower despite continued disruption due to factors such as intermittent shipping, informal arrangements, and expanded capacity on alternative transportation routes.

The assessment is based on a more cautious view of the conflict's impact on global energy markets, with abundant inventories and weak Chinese oil demand providing some support to the market while limiting upside pressure from supply disruptions.