UBS Lowers Brent Crude Price Forecasts Amid Improved Oil Flows

UBS has cut its Brent crude price forecast by $25 for the September quarter to around $80 a barrel, on average. This revised forecast is attributed to improved oil flows via the Strait of Hormuz following the recent U.S.-Iran agreement.

The bank also lowered its 2027 average Brent crude price forecast by $10 to $75 per barrel. Since the MoU, oil transits through the Strait have recovered to around 50% of pre-conflict levels, with Iranian crude regaining momentum as the U.S. blockade eases.

UBS expects normalisation to be gradual, noting that inbound tankers to the Persian Gulf have lagged outbound tankers by 2:1 recently. Additionally, slower demand growth in China would mean it would not have to substantially draw from its inventory in the near term, implying its imports may remain lower for longer.