UBS raises 2026 2027 Brent price forecasts on Middle East supply risks
UBS has raised its forecast for Brent crude oil prices in 2026 and 2027, citing persistent supply disruptions in the Middle East. The bank now expects Brent to reach $100 per barrel in the fourth quarter of 2026, up from its previous estimate of around $80. The 2026 average price forecast has also been adjusted to $91.57, up from $83.74.
The revision comes after the collapse of the June US-Iran Memorandum of Understanding, which has led to ongoing attacks and disruptions in the region. While flows through the Strait of Hormuz have improved recently, UBS warns that the recovery is fragile due to continued Iranian attacks.
The bank anticipates a gradual normalization of oil flows by the first half of 2027, assuming a similar agreement to the June MoU is reached by the end of the year. However, it notes that near-term risks remain high, with new attacks potentially pushing prices above $120 per barrel.
Oil prices fell on Tuesday, with Brent crude futures dropping 1.8% to $98.48 per barrel and US West Texas Intermediate futures declining 1.9% to $87.70. The drop was attributed to resilient Middle Eastern crude exports and a G7 emergency stockpile release, though security risks in the region capped further losses.