Overview
Major brokerages UBS, Barclays and Mizuho have each adjusted upward their oil price forecasts following disruptions to shipping through the Strait of Hormuz. The moves come as tanker traffic has been severely constrained, tightening supply and sending Brent higher, at one point trading near $102.6 per barrel on Tuesday.
UBS: Markets on edge and prices biased higher
Swiss bank UBS described crude markets as "on edge," reporting that tanker loading in the Strait of Hormuz has "nearly ground to a halt" while alternative export routes are operating close to capacity. UBS strategist Jon Gordon warned that limited progress to reopen the key transit point has contributed to rising crude prices.
UBS has revised its price path for Brent, forecasting $90 per barrel by the end of June, easing to $85 by the end of September and again by the end of December 2026, and settling at $80 by the end of March 2027. Gordon said the path of least resistance for oil prices is now tilted to the upside, pointing to worsening supply disruptions and limited spare capacity.
Gordon also noted that a coordinated release of roughly 400 million barrels from OECD reserves would only partially compensate for the supply shock. He said the pace of those releases falls short of potential production losses that could reach 10 million barrels per day. In addition, UBS highlighted rising refined product prices, forecasting that diesel, jet fuel and LPG could remain elevated and possibly rise faster than crude.
Given the combination of physical supply issues, constrained reserve relief and geopolitical risk, UBS argued prices are likely to remain "higher for longer" even if flows through the Strait resume within weeks. In that context the firm signaled continued support for exposure to energy, gold and other real assets as portfolio diversifiers.
Barclays: Conflict accelerates tightening; normalisation expected at a higher level
Barclays raised its 2026 Brent forecast to $84 per barrel, saying the Iran conflict has accelerated an existing tightening trend. Analysts led by Lydia Rainforth wrote that short-term oversupply concerns have been replaced by material physical outages that have tightened supply/demand balance estimates, requiring inventory rebuilds after disruptions.
The bank estimated about 8 million barrels per day of crude production have been shut in across the Middle East, along with broader disruption to liquids and LNG flows. Barclays also increased its refining margin assumptions by more than 110%, lifting them to roughly $11 per barrel. The firm now expects prices to normalise at a higher level than before the conflict, nearer $80 per barrel over the longer term rather than the roughly $70 previously projected.
Mizuho: Significant upward revisions to 2026 outlooks
U.S.-based Mizuho raised its 2026 outlook for Brent and WTI by about 14% and 12%, respectively, to $73.25 for Brent and $68.25 for WTI. The broker noted that even short periods of disruption can materially tighten the market. Displaced supply reduces the projected 2026 oversupply and makes a return to lower price scenarios increasingly unlikely.
Mizuho estimated that a single month of displaced crude output, at approximately 7.1 million barrels per day, would materially reduce expected oversupply in 2026 and tighten the overall market balance. The firm said the probability of a sharp fall in prices toward the low-$50 range has become "negligible," and suggested that a mid-year rebalancing could keep Brent within a $70 to $75 range. On whether the disruption will produce structurally higher long-term prices, Mizuho said there is a bias toward higher levels but it is too early to make a definitive call.
Implications
Across the notes, the three brokerages emphasized that constrained tanker traffic, high utilization of alternative routes, and sizeable shut-ins in Middle Eastern production are central to the revised outlooks. They also highlighted the limited capacity of coordinated reserve releases to fully offset potential losses and the knock-on effect on refined product prices.
The analysts collectively underscored that the market now faces a reduced probability of a rapid price collapse and a greater risk of sustained strength in crude and refined product prices until flows and capacity conditions normalise.