For the first time since the war began in Iran, analysts have lowered their oil price forecasts — Reuters

Following the reopening of the Strait of Hormuz, economists and analysts in a monthly Reuters survey lowered their expectations for the average price of oil in 2026 for the first time since the start of the conflict in the Persian Gulf. Prior to this, they had consistently raised these forecasts over the course of five months. Analysts now note an increase in crude oil supply toward the end of the year and a slowdown in demand in 2027.

The average forecast by 31 experts for the average annual price of Brent crude in 2026 fell to $84.5 per barrel, down from $90.44 a month earlier, according to Reuters. U.S. crude, according to survey participants, is expected to average $79.49 per barrel, down from May’s forecast of $84.63. This latest revision represents a decline of more than 6% compared with May.

On average, analysts expect Brent to fall from about $84 in the third quarter to $79 in the fourth quarter of 2026, and to about $75 per barrel by mid-2027, according to the survey.

Oil prices were virtually unchanged on Tuesday but are poised for their biggest monthly and quarterly declines since 2020, according to Reuters. Brent crude futures are trading around $73 per barrel, while WTI futures are at $69.7 per barrel.

Analysts' forecasts for oil prices rose sharply after the U.S. and Israel began their conflict with Iran in late February. At its peak in recent months, the price of Brent crude jumped above $126 per barrel, while WTI rose to nearly $120. Easing geopolitical tensions and the resumption of shipping through the Strait of Hormuz have alleviated concerns about prolonged supply disruptions, Reuters notes. However, some market participants have warned that lingering geopolitical risks could still prop up prices.

Shipping through the Strait of Hormuz began to gradually resume after June 18, when the United States and Iran signed a memorandum of understanding. At that time, the parties also agreed to a ceasefire for the duration of the negotiations, which are to last 60 days. Following the negotiations, shipping through the Strait of Hormuz is expected to return to pre-war levels.

According to a Reuters survey, the growth rate of oil demand in 2026 is expected to slow by approximately 1–2 million barrels per day. Analysts believe that demand is falling due to a slowdown in consumption in China—the world’s largest oil importer.

At the same time, OPEC maintained its forecast for oil demand growth in 2026 at around 1.4 million barrels per day from February through April, then lowered it to about 1.2 million barrels per day in May and to less than 1 million barrels per day in June, Reuters notes. Several economists surveyed by the agency expect OPEC+ to continue increasing production, albeit at a moderate pace, in an effort to regain market share while preventing a sharp drop in prices.

In its first forecast for 2027, against the backdrop of the resumption of shipping through the Strait of Hormuz, the International Energy Agency stated that the oil market will face a supply glut: global supply is expected to rise by 8 million barrels per day, while demand will increase by only 2 million barrels per day.

— “Most of the geopolitical risk premium has already faded,” — UniCredit analyst Tobias Keller told Reuters, adding that the resumption of oil flows from the Middle East and weaker demand are likely to limit further price increases.”

“I wouldn’t say the market has completely ‘priced out’ the geopolitical risk premium, but ships that were previously stranded are now becoming available as more vessels leave the Persian Gulf, creating a temporary surge in new supply,” — UBS analyst Giovanni Staunovo told Reuters.

— “If traffic through the Strait of Hormuz returns to normal, the oil market will once again find itself in a surplus. Therefore, prices will continue to fall in the second half of 2026,” Frank Schallenberger, head of commodities research at LBBW, told Reuters.

— “Our balance sheet estimates for 2026 indicate a market deficit of approximately 2 million barrels per day... and a return to a small surplus of about 1 million barrels per day in the fourth quarter of 2026, provided that production in the Persian Gulf recovers to near-normal levels,” — said Kim Fustier, head of European oil and gas research at HSBC, in an interview with Reuters.

This article was AI-translated and verified by a human editor