Analysts dial down oil forecasts as Hormuz reopening eases supply concerns
Why this matters: local context for readers following news across Pakistan and the region.
Analysts have cut their 2026 oil price forecasts for the first time since the Iran war began, after five straight monthly increases, as the reopening of the Strait of Hormuz eases concerns over prolonged supply disruptions, a Reuters poll showed on Tuesday. The monthly survey of 31 economists and analysts forecast Brent crude would average $84.50 per barrel in 2026, versus $90.44 projected last month. U.S. crude was seen averaging $79.49 per barrel, down from May’s view of $84.63. The latest revisions mark a more than 6% decline from May estimates. Forecasts had jumped following the outbreak of the Iran conflict at the end of February that disrupted oil supplies and drove oil prices to multi-year highs. Oil benchmarks have since fallen significantly from peaks above $126 per barrel for Brent and nearly $120 for WTI as easing geopolitical tensions and the restoration of shipping flows through the Strait of Hormuz alleviated fears of prolonged supply disruptions. “The bulk of the geopolitical risk premium has already unwound,” said UniCredit analyst Tobias Keller, adding that recovering Middle East flows and weaker demand are likely to cap further upside. On average, analysts see Brent easing from about $84 in the third quarter of 2026 to around $79 in quarter four, before falling to the mid-$70s by mid-2027, according to the poll. However, some market participants cautioned that lingering geopolitical risks could still provide support to prices. Supply returns as risks ease “If traffic through the Strait of Hormuz comes back to normal, we will go back to supply surplus on the oil markets. Therefore prices will continue to go down in the second half of 2026,” LBBW’s head of commodity research Frank Schallenberger said. During the conflict the closure of the Strait of Hormuz had choked off nearly a fifth of global oil supply, forcing a sharp drawdown in inventories and pushing markets into a deficit in 2026. “Our 2026 balance estimates show a market in about a