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Summary
- Brent projected to average $86.38 per barrel in 2026
- WTI projected to average $80.07 per barrel in 2026
- For table of crude price forecasts, click
(Reuters) – Analysts have increased their oil price forecasts for the second time since the Iran war began at the end of February as they factor in the prospect of prolonged energy market disruption, a Reuters poll showed on Thursday.
International Brent crude has reached its highest in more than four years at above $120 a barrel.
The survey of 32 economists and analysts, conducted in April, forecast Brent crude would average $86.38 per barrel in 2026. U.S. crude was projected to average $80.07 per barrel, up from March’s view of $76.78.
Last month, analysts projected Brent would average $82.85 a barrel this year, marking a 30% increase in their forecasts from February.
“The main driver of the market at the moment is the situation around Iran and the closure of the Strait of Hormuz, and the key variable is when the Strait reopens and flows resume,” Anushree Ganeriwala, Global Analyst at The Economist Intelligence Unit said.
For the longer term, the United Arab Emirates’ decision announced this week to leave OPEC and OPEC+, could help to moderate prices once the Middle East conflict comes to an end, some analysts said.
The poll was carried out before the UAE’s announcement.
PRICES TO REMAIN HIGH
Brent has more than doubled over the year to date as the closure of the Strait of Hormuz following the U.S.-Israeli attacks on Iran at the end of February had caused large-scale disruption of energy supplies.
A sustained rise above current levels and possible records in the oil futures market “is definitively a possibility if the Strait remains effectively closed for several more months,” said Bridget Payne, Head of Energy Forecasting at Oxford Economics.
Most analysts flagged that prices are likely to stay elevated even in a scenario of de-escalation, with production and exports expected to take months to recover.
“Market tightness is set to persist even if peace negotiations progress, as any rebound in Middle Eastern exports would be gradual,” analysts at Kpler said.
It will take about two years to recover the energy output lost in the Middle East, Fatih Birol, the head of the International Energy Agency said earlier this month.
Non-OPEC production is estimated to grow by a modest 0.5 million bpd to 2.4 million bpd this year, analysts said.
SUPPLY DEFICIT AND DEMAND SLOWDOWN
A snap poll conducted separately by Reuters earlier this month predicted that the production hit from the war was likely to flip the oil market into a supply deficit this year, overturning previous views that there would be a cushion of oversupply.
The Organization of Petroleum Exporting Countries in April maintained its forecast that world oil demand will rise by 1.38 million bpd in 2026, in contrast to the U.S. Energy Information Administration that halved its prediction in an April 7 report.
The EIA expects world oil demand to grow by about 600,000 barrels per day to 104.6 million bpd.
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