UBS lowers 2026-2027 oil price forecasts as Hormuz flows recover

UBS on Thursday reduced its oil price forecasts for this year and next as oil flows through the Strait of Hormuz picked up, with transits recovering to about 50% of pre-conflict levels and Iranian crude exports also regaining momentum as the U.S. blockade eases.

• The bank lowered its third and fourth quarter 2026 Brent forecasts to $80 per barrel. It now expects Brent to average $83.74 per barrel in 2026, down from its previous forecast of $93.28, and cut its 2027 forecast to $75 per barrel, $10 per barrel below its old estimate.

• Oil prices fell for a third consecutive day on Thursday as concerns over supply disruptions eased after Qatar said Iran and the U.S. had made progress in talks over the Strait of Hormuz.

• Brent crude futures ICEEUR:BRN1! were down 1.3% at $70.64 a barrel, as of 0917 GMT, while U.S. West Texas Intermediate NYMEX:CL1! fell the same amount to $67.72 a barrel.

• "From here, we see Brent trading in a $70–100/bbl range, with the path largely determined by the pace of Hormuz normalisation and durability of the US-Iran MoU," UBS analysts wrote in a note.

• UBS noted that downside risks stem from a faster reopening of the Strait of Hormuz and strong supply growth, particularly from the UAE, which could pull Brent towards $70 per barrel. However, a breakdown of the MoU, renewed risks to the Strait of Hormuz and Gulf oil flows could send Brent back to $100 per barrel, while more severe disruption scenarios could lift prices to $120 per barrel.

The table below lists price forecasts after the U.S.-Iran peace deal announcement: