Oil Prices Poised for Further Gains Amid Middle East Supply Disruptions

Oil prices are expected to rise further this year due to ongoing supply disruptions in the Middle East, according to a Reuters poll of 31 economists and analysts. The survey forecasts Brent crude will average $85.22 a barrel in 2026, up from June's estimate of $84.50.

The key support for oil prices remains the geopolitical risk premium associated with the Iran conflict, which is likely to persist through the second half of the year and keep volatility elevated, said UniCredit analyst Tobias Keller.

Disruptions in the Strait of Hormuz and attacks by Iran-backed Houthis in the Red Sea have sharply reduced traffic through these key shipping routes, disrupting Middle East output running into millions of barrels a day. Normalization of oil flows from the Gulf is expected to take four to six months after a durable ceasefire between the US and Iran.

Oil demand growth is seen falling in 2026, with estimates ranging from a decline of 1 million bpd to 2.6 million bpd. OPEC lowered its forecast for world oil demand growth in 2026 to 780,000 barrels per day, marking the third downward revision.