UBS Trims Brent Crude Forecast Amid Improved Hormuz Oil Flows

UBS has reduced its forecast for Brent crude prices in response to increased oil flows through the Strait of Hormuz. According to the bank, Brent crude prices are now expected to average $80 per barrel during the September quarter, down from a previous estimate of $105. This revised forecast is based on improved oil transit levels through the Strait since the recent U.S.-Iran agreement.

UBS notes that Iranian crude has regained momentum as the U.S. blockade eases, with oil transits through the Strait now reaching around 50% of pre-conflict levels. However, the bank also warns that normalisation is expected to be a gradual process, citing a recent imbalance in tanker traffic where inbound vessels have lagged outbound vessels by 2:1.

Additionally, UBS has lowered its forecast for Japan Korea Marker LNG prices, predicting they will average $17.5 per mmbtu for the remainder of the year, down from $22 per mmbtu. For 2027, the bank expects these prices to reach $13 per mmbtu, down from a previous estimate of $14.5.