On March 4, UBS revised upward its near-term and 2026 Brent crude price projections, attributing the change to rising tensions in the Middle East and the current near de facto closure of the Strait of Hormuz. The bank now expects Brent to average $71 per barrel in the first quarter, a pace that implies roughly $80 per barrel in March.
For the full year 2026, UBS increased its Brent outlook to $72 per barrel, marking a $10 increase from its previous forecast. The bank said it will keep its later-year forecasts unchanged at this time, leaving Brent at $70 for 2027 and $75 for 2028, while noting that risks point to the upside.
UBS downside and upside scenarios
UBS highlighted scenarios that could push prices considerably higher. In particular, the bank warned that strikes on regional energy infrastructure - citing Qatar LNG as an example - could propel Brent above $90 per barrel. It added that a prolonged closure of the Strait of Hormuz could drive prices past $100 per barrel.
At the same time, UBS said a near-term de-escalation of hostilities could remove some of the current risk premium. Even so, the bank judged it unlikely that prices would fall back to the roughly $60 per barrel level seen at the start of the year.
Market context
At the time of UBS's revision, Brent was trading near $82.32 per barrel, after closing on Tuesday at its highest level since January 2025. U.S. West Texas Intermediate crude traded around $74.73 per barrel, having settled at its highest level since June.
The bank's adjusted forecasts and scenario analysis underline how geopolitical developments and potential disruptions to regional energy flows remain primary drivers of short- to medium-term oil price risk.
What this means for markets
- Energy markets may face elevated price volatility while the regional situation and shipping disruptions persist.
- Producers, traders and companies exposed to oil price movements could see material impacts on cash flows and valuations if upside scenarios materialize.
- Any de-escalation that trims the risk premium could reduce near-term volatility, but UBS's baseline suggests a higher floor for prices than earlier in the year.