Oil Prices to Rise as Middle East Supply Disruptions Persist

Oil prices are expected to rise further in 2026 due to ongoing supply disruptions in the Middle East. A Reuters poll of 31 economists and analysts forecast that Brent crude would average $85.22 a barrel, up from June's estimate of $84.50. US crude is projected to average $80.14 a barrel.

The key driver behind these price increases is the ongoing conflict between Iran and the US, which has disrupted shipping through the Strait of Hormuz and led to reduced traffic. The Houthi militia in Yemen have also targeted ships in the Red Sea, creating a second chokepoint for oil flows.

Analysts believe that normalisation of oil flows from the Gulf will take around four to six months after a durable ceasefire is reached between the US and Iran. However, even then, prices are expected to remain elevated due to ongoing geopolitical tensions.